=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2004/05= /11/BUGN96J8CN1.DTL --------------------------------------------------------------------- Tuesday, May 11, 2004 (SF Chronicle) SFO to cut its fees and rents/Action designed to aid cash-strapped airlines= , airport David Armstrong, Chronicle Staff Writer San Francisco International Airport will slash fees and charges for commercial airlines in the coming fiscal year in a bid to make itself more attractive to the nation's money-strapped carriers. The move, approved by the San Francisco Airport Commission last week, wi= ll take effect July 1, when SFO begins its 2004-05 fiscal year, Airport Director John Martin said Monday. Led by an 8.4 percent cut in terminal rents and an 18.2 percent slash in landing fees, the cuts will drop the airlines' estimated cost per enplanedpassenger at SFO by 9 percent, from $17.23 in fiscal 2003-04 to $15.71, SFO figures show. Cost per enplaned passenger, one who gets on the plane at that airport, is the most commonly used aviation industry statistic. "After the attacks of 9/11, airports were under tremendous pressure to help reduce costs for the airlines," Martin said. Many large carriers, notably United Airlines, the bankrupt carrier that handles about half of all flights and passengers at SFO, are still losing millions of dollars. The lower airport rates, Martin said, are designed to help SFO help the airlines while also boosting the airport. SFO, long saddled with high fees and overhead from major construction projects such as the 2000 International Terminal and the 2003 BART extension, has been an expensive place to operate. "Certainly, lowering your costs will only help you," observed Standard & Poor's ratings analyst Mary Ellen Wriedt. "However, they're taking down from a very high level. It's still a moderately high" cost. Wriedt cautioned that SFO still faces major challenges, in part because = of United's poor financial position. But, she said, "It's important for the airlines to see the airport is trying to contain costs. That will go a long way, given that airline margins are so shallow." SFO was hit hard by the drop in traffic after Sept. 11, and by the Iraq war, the dot-com implosion and the SARS outbreak. However, SFO's statistics show a 5 percent increase in international traffic in March from March 2003, lifted by an industrywide increase in flying ahead of the peak summer travel season. According to the Travel Industry Association of America's annual forecas= t, released Monday, "The long-awaited travel industry recovery is in full swing and will remain so through 2004 and 2005. Overall spending by domestic and international travelers is expected to grow 6 percent this year alone," fueled by growth in both leisure and business travel in all modes of transportation. E-mail David Armstrong at davidarmstrong@sfchronicle. com. -------------= --------------------------------------------------------- Copyright 2004 SF Chronicle