What is the guiding principle for aeronautical rate setting?

• A. They should be set to cover the cost of airfield facilities and services
• B. They should be set to maximize revenue from all tenants
• C. They should be set solely to fund Community Programs
• D. They should be set to mirror non-aeronautical rates

Answer: (A)

Aeronautical rate setting is driven by cost recovery: charges should cover the costs of providing airfield facilities and services. This ensures the airport can operate safely and maintain facilities, recover operating and capital costs, and plan for future needs. When rates are based on the actual cost of services, use is priced according to the value and burden of those services, promoting fairness among users and preventing cross-subsidies from other revenue sources.

If you tried to maximize revenue from all tenants, fund community programs through aeronautical charges, or mirror non-aeronautical rates, you’d move away from charging based on the true cost and usage of aeronautical services. Those approaches can distort pricing and undermine financial sustainability. So the guiding principle is to set rates to cover the cost of airfield facilities and services.