Appeals court upholds Bush DOT's ‘peak pricing’ rule

A US federal appeals court yesterday upheld the Dept. of Transportation's 2008 rule allowing airports to charge higher landing fees during "peak" periods, with the presiding judge telling objecting airlines that congestion pricing's "creativity should be welcomed on its merits, not spurned for its novelty."

However, it is unclear how the Obama administration's DOT will enforce the rule, which was established in the final year of President George W. Bush's administration and would permit US airports to base airline rates and charges on "market incentives" as well as the traditional aircraft weight metric currently used (ATW Daily News, July 11, 2008).

Late in his presidency, Bush became concerned about delays and congestion at airports (when the economy was still relatively strong) and pointed to "the underlying problem" being airlines' "scheduling more arrivals and departures than airports can possibly handle…The key to solving this problem is managing the demand for flights at overloaded airports."

The US Air Transport Assn. filed a lawsuit against the rule and airports refrained from using it to set charges while the legal case carried on. "ATA is reviewing the US Court of Appeals’ decision," the organization said yesterday. "We remain concerned about the threat of unreasonable and unjustified airport rates and charges and their potential adverse impact on the cost of air transportation.”

Airports Council International-North America President Greg Principato called the court's ruling a "landmark decision [that] strongly upholds the rights of airport proprietors to manage airfield congestion and help prevent delays by modifying landing fees…The court’s decision specifically permits airports to impose a two-part landing fee structure and vary landing fees throughout the day at congested airports. Faced with higher fees, the airlines can shift flights to less traveled hours, change the size of the aircraft flown during peak periods or pay higher fees to fly at the busiest hours."

Judge Douglas Ginsburg wrote in his ruling that it is "entirely reasonable to expect an airline, and in turn its passengers, to pay a premium for the opportunity to arrive at a peak time."