Gene, U.S. airports receive fees such as passenger facility charges that the airlines collect on each flight. These PFCs fund airport improvement projects for runways and taxiways. I am not clear if PFCs fund projects such as “palatial terminals” at U.S. airports. What did the WSJ article say?
Seth Sandronsky Date: Wed, 17 May 2006 16:05:43 -0700 From: Eugene Coyle <[EMAIL PROTECTED]> Subject: Farms and airlines? What else? This is a multi-part message in MIME format. --------------040306090401000801070806 Content-Type: text/plain; charset=us-ascii; format=flowed Content-Transfer-Encoding: 7bit Today's (5/17/06) front page of the WSJ has a story: "Airports Start to Feel the Sting of Airline Cost-Cutting Efforts." The story tells how palatial terminals at airports have driven up landing fees, which airlines are now resisting. What caught my eye was this: "The battle over fees between cost-conscious airlines and image-conscious airports highlights a strange fact about the airline business. While airlines historically have struggled to earn profits -- the U. S. industry has tallied cumulative losses of $38 billion since 2001 -- suppliers, vendors and others dependent on airlines usually do well. Maintenance firms, leasing companies, manufacturers like Boeing Co. and city-owned airports feed off the money-losing airlines business, but are profitable themselves." Sounds similar to commodity farming, does it not? Monsanto, Cargill and ADM, banks, John Deere and other equipment vendors, etc., make profits while farmers struggle and go under. Are there other industries like this? Unable to be profitable while selling at marginal cost, but supporting a network of suppliers and downstream marketers? Gene Coyle
