--- In BATN@xxxxxxxxxxxxxxx, "1/30 SF Business Times" <batn@xxxx> wrote: Published Friday, January 30, 2004, in the San Francisco Business Times Airlines land at SFO Airport slices fee to attract more carriers By Eric Young Five months after San Francisco International Airport held out a carrot to the airline industry, a number of carriers are biting. Three airlines are taking advantage of a program that halves SFO's landing fees in exchange for launching new domestic routes from SFO. Airport officials said the program has shown enough promise that they want to extend it to international carriers -- and may explore other incentive programs for airlines. SFO launched the program last August, when passenger traffic was still slumping due to a slowing economy and traveler jitters over war and SARS. Since then ATA, America West and AirTran Airways have all launched new service involving SFO. These flights are expected bring a few thousand more passengers through SFO during the year. Landing fees at SFO are normally $3.93 per 1,000 pounds. A full 737 landing every day for a year would cost an airline $210,000, airport officials said. That's small compared to bigger costs at airports such as gate leases. And airlines said the reduced SFO fees were not the main reason they decided to launch new services. But the savings was appreciated nevertheless, airline executives said. "It was a positive," said Stan Hula, a vice president of planning at ATA who helped launch the airline's new routes from SFO. "While it's meaningful, it's a small percentage of the cost of operations" at the airport. Airport officials said the cut-rate fees were designed to let airlines know that during a period of declining flight travel, SFO wanted their business. "We need to be competitive," said John Martin, SFO's director, especially since neighboring airports in Oakland and San Jose are trying to boost their business. (Landing fees at those airports are less than half SFO's normal rate.) Martin said the landing fee plan crafted for domestic carriers will expire in April, meaning fees will go back to normal. But he wants to offer a similar landing fee reduction program aimed at international carriers. He would like to see such a program start this spring and he plans to discuss it with the members of the Airport Commission. Carriers such as Air New Zealand, which announced a new route to SFO, could qualify for such a program. SFO executives said the airport is in negotiations with four international carriers about starting new flights to SFO. Airport officials said they hope that with an uptick in the economy, they will see increased international and domestic travel. SFO's passenger traffic slump has been steeper than that at most airports. The number of passengers at San Francisco International, the nation's ninth busiest facility, fell 27 percent over two years, compared with an average decline of 13 percent across the country at large airports, according to Moody's Investors Service. But recent figures give SFO officials reason to think that the drop in traffic might have bottomed out. Passenger traffic for 2003 is expected to be 31.468 million versus 31.456 million for 2002. Eric Young covers transportation for the San Francisco Business Times. --- End forwarded message ---