8. Reduced Airline Charges

While airlines may fear that landing fees will rise as a direct result of privatization, the opposite could occur. If landing fees are based on number of passengers rather than weight, an airport operator could maximize revenue by reducing landing fees to encourage more passengers (primarily from airlines using Metro as a hub). While the lower landing fees would not be significant enough to affect fares charged to passengers, the fees would be more sensitive to the airlines' passenger loads. The relationship between airport revenue and the airline market will provide incentive for the airport to be customer service-oriented.

By reducing the importance of weight in landing fees, an airline would incur lower fixed costs per flight. With a commensurate increase in charges for each passenger, the airport would realize no change in gross revenue. However, the impact on airlines would be lower costs per flight if the airline increased capacity. This would enable the airline to use larger aircraft at lower net cost per passenger thereby increasing profitability and reducing delays due to a larger numbers of departures of smaller aircraft. (For a more detailed explanation, see the Appendix.)

With a lower net charge per passenger, Metro would be establishing price competition with other airports. While perhaps not significant enough to lower the price of airline tickets for its passengers, an airline might receive incentive to expand service at Metro (including increasing hub operations) as an alternative to other airports which charge higher fees.