DISTRIBUTION DATE: May 1, 2007 FOR RELEASE UPON RECEIPT
TAA BOARD APPROVES INCREASE IN OFF AIRPORT PRIVILEGE FEE;
RENTAL CAR CUSTOMER FACILITY CHARGE
At their meeting today, the Tucson Airport Authority board of directors increased the off-airport rental car privilege fee to 10% from 7.5% of gross receipts. The board also approved increasing the on-airport rental car customer facility charge (CFC) by $1 to $4.50 per rental car contract. Both of these changes will go into effect August 1, 2007.
TAA currently charges privilege fees of 10% of gross receipts to on-airport rental car companies, and 7.5% to off-airport companies. The TAA board first instituted the 7.5% off-airport fee on January 1, 1989. It has not been increased since then. In FY 2006, off-airport gross receipts were $2,758,522, which included Thrifty and Adobe Rental Car companies. This generated $206,891 in privilege fees at the 7.5% rate.
“According to our consultants the great majority of airports charge the same privilege fees for both on-airport and off-airport operators, and 10% of gross receipts is a commonly accepted rate throughout the country,” said TAA President/CEO Bonnie Allin.
“It’s important to maintain this fee at an appropriate amount for several reasons,” explained Ms. Allin. “Under FAA regulations, TAA is required to be financially self-sustaining. In addition, the off-airport rental car companies realize direct benefit from passenger activity and the entire airport infrastructure provided by TAA. Also, making the off-airport fee equal to the on-airport fee recoups lost revenue from business taken by off-airport operators from on-airport operators and eliminates any incentive on-airport rental car companies might have to leave the airport.”
CFC’s are a common tool used by airports around the country to pay the cost of on-airport rental car facilities. Most airports impose a daily fee whereas in Tucson the CFC is on a “per contract” basis.
“The existing CFC was established by the TAA board in 2002,” continued Ms. Allin, “as a mechanism to repay TAA the interest cost of financing the $19.4 million consolidated rental car facility that opened in August 2002.
“TIA’s $4.50 per contract CFC compares favorably to most other airports, especially on rentals greater than one day. At the $4.50 rate, TAA estimates CFC collections will be approximately $1.3 million annually,” she said.
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