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Massport Holds the Line on Boston Logan Rates and Charges
Free Silver Line Service to Continue through New Year
BOSTON – The Massachusetts Port Authority Board today approved a series of rates and charges for airlines at Boston Logan International Airport. The rates are in effect from Oct. 1, 2012 to Sept. 30, 2013, but can be adjusted in the middle of the year.
Massport follows federal regulations to determine the landing fees, terminal rents and baggage screening fees and they are computed annually to cover the operating and capital costs associated with the operation, maintenance and capital improvements to the airfield, the terminals and the baggage screening system. The rates are not a source of net revenue for Massport and they are established based on service projections provided by the airlines.
“Over the last several years, airlines serving Logan have seen a savings in airport rates and charges,’’ said Massport Interim CEO David Mackey. “ Because Logan’s activity was higher than projections, approximately $7.9 million of extra collections will be returned to the airlines through credits to their passenger fees, and landing fees.’’
Even though the airport served a record 29.3 million passengers in the fiscal year, last year’s unusually mild winter and other cost savings resulted in Logan’s airfield operational costs coming in at $8.8 million below budget, including $1.4 million which was saved in utility expenses due to a historically low natural gas prices. Once all airfield and terminal expenses and revenues are reconciled, the landing fee rate will be 7 cents lower than the rate voted by the Board last September and the terminal rates will be lower as well. These savings will be passed on to the airlines.
The Board adopted new rates for FY13 that set landing fees at $4.34 per 1,000 pounds, a 2 cent drop and the lowest they have been since FY 2008. The new rates keep airline fees only 2% higher than last year’s budgeted amount. This modest increase was possible in part due to Massport maintaining controls on spending, combined with a significant savings in financing costs from a recent bond offer which lowered finance rates to 4.2%. New terminal building rates will be approximately 3.2% higher as Massport continues to invest capital in terminal improvements to better accommodate passenger growth and airline mergers and consolidations. These include renovations to the Terminal C ticketing hall, as well as the consolidated checkpoint and concession area opened last year, and new roadway curbs and public space improvements in Terminal B.
Massport Interim CEO David S. Mackey told the Board that “the new rates have been reviewed with the airlines and the Boston Airline Committee, which have again expressed their appreciation for Logan’s ability to manage costs well.”
In other business the popular free Silver Line service between Logan Airport and South Station and the MBTA’s Red Line rapid transit system will continue through January 6, 2013. The pilot program started in June and was initiated to improve terminal curbside traffic flow and heighten awareness of public transit options to and from the airport. The pilot program has yielded operational improvements for the Silver Line service at the airport. Passengers are now able to alight and board the buses using all doors, which has noticeably reduced dwell times at the terminal curbs resulting in faster travel times for the bus through the airport.
The Silver Line, which started service in 2006, is a keystone in Massport’s efforts to promote HOV ridership to and from the airport to reduce congestion at the terminal curbs and on airport roadways, as well as reduce vehicle emissions. Massport purchased eight clean-fuel Silver Line buses for the MBTA in 2005.
Massport receives no state tax funding and is governed by a seven member Board. Six of the members are appointed to staggered seven-year terms by the Governor of Massachusetts, and the Secretary of Transportation serves as an ex officio member.
Boston Logan, 15 minutes from the intersection of Route 128 and I-90 and five minutes from downtown Boston, serves as the gateway to the New England region and offers nonstop service to 72 domestic and 31 international destinations and in 2011 handled 28.9 million passengers. Boston Logan is the Air Line Pilot Association’s Airport of the Year for 2008 because of its commitment to safety. Over the past decade, the airport spent $4.5 billion on a modernization program that includes new terminals, public transportation access, parking facilities, roadways and airport concessions, and has been transformed into a world-class 21st Century facility. The airport generates $7 billion in total economic impact each year.
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The Massachusetts Port Authority (Massport) owns and operates Boston Logan International Airport, public terminals in the Port of Boston, Hanscom Field and Worcester Regional Airport. Massport is a financially self-sustaining public authority whose premier transportation facilities generate more than $8 billion annually, and enhance and enable economic growth and vitality in New England. No state tax dollars are used to fund operations or capital improvements at Massport facilities.