LAX Rent Increase Ruled Not Discriminatory, But Fight Continues

There was interesting ruling out of the appeals courts last week. LAX's efforts to jack up rent for some airlines and not others was ruled to be not discriminatory. But that doesn't mean this fight is over.

LAX is in a strange situation in that some of its terminals are under long terms leases (United and American, for example) while other terminals are not. So, LAX tried to increase its rents where it could and that, of course, meant leaving the rents alone for those terminals under lease.

The airlines facing the rent increase banded together to sue, saying that the increase was discriminatory. The appeals court said that no, it wasn't. But the court also noted that the DOT needs to consider whether the airport has monopoly power and that could impact their ability to increase rates. That's why this fight isn't over yet.

The airlines will, I have to assume, keep fighting. Southwest has said that its rent would jump from less than $5 million a year to more than $20 million. That's a huge increase and it could cause airlines to reduce flights. Airports Council International - North American (ACI-NA) applauded the decision but noted that it's far from over.

We believe it is premature to predict the outcome of the DOT on [whether the alleged use of monopoly power by the airport was relevant to the fee dispute] or any other unresolved issue.