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.



  • 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

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

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. The Walgreens did not get a lot of traffic. It was not located on the corner of the intersection, and not really visible from Emerson. Meanwhile the CVS there is huge and right on the corner. I am guessing a lot of people drove by a million times and never knew the Walgreens was there. Although, with the new Walmart market going in, that area could really see a lot of increase in traffic soon.

  2. You folks don't have a clue. There is a legal way to enter this country and to get aid. This left unchecked could run us to ruin quickly. I also heard that 'supporters' were getting major $$ to take them in? Who's monitoring this and guess who pays the bill? I support charitable organizations... but this is NOT the way to do it!

  3. Apparently at some time before alcohol has been served at the fair. The problem is that beer or wine used to be a common drink for people before soft drinks and was not thought to be that unusual. Since many folks now only drink to see how much they can drink or what kind of condition they can end up in it becomes more problematic. Go to Europe and its no big deal just as if you had sodas of milk to drink everyday. Its using common sense that is lacking now days.

  4. To address the epic failure of attracting race fans to both the Indy 500 and Brickyard 400 would take too much of my time to write. Bottom line Boles is clueless and obviously totally out of touch with the real paying fan base. I see nothing but death spin coming for the Brickyard, just like Indy. Get somebody in a place of power that understands what race fans want.

  5. I am a race fan through & through. It doesn't matter if it's Indy cars or Nascar. I love a great race. I go to several other tracks each year and you can see the entire track. I know Indy has tradition, but fans want to see the entire race. I sit in the Penthouse, am almost 60 years old, and would like to see a better TV screen in turn 1 so you can see the entire race. Then I think Indy needs to install an escalator so us old folks can make it up to the Penthouse and down again if we want more options to purchase food and drinks. Just a race fans opinion. Lights won't make the race any better, but you might be able to see the TV better at night. Turn 1's screen needs replaced with a better and bigger screen.