Ontario may want out of Los Angeles World Airport’s control
All of California's secondary airports, in both the Los Angeles and San Francisco regions, have been hard hit since the economic collapse as airlines retrenched at the major hub. But LA/Ontario International Airport (ONT), 35 miles east of downtown Los Angeles, has been particularly hard hit to the extent that some are calling for its release from Los Angeles World Airports (LAWA).
A partnership that once showed promise
The airport is owned by LAWA, which also owns Los Angeles International Airport (LAX) and the general aviation facility, Van Nuys. LAWA's original intent was to use Ontario, a large facility with expansion possibilities, as a way to relieve congestion at boxed-in LAX.
The airport dates back to pre-war days when the "inland empire" as it is now known, was very rural and far from the still fledgling Los Angeles. However, as the metropolitan area grew, LAWA understood the eventual need for an alternative and, in 1967, joined with the city of Ontario and brought the airport into LAWA.
In the years following deregulation, and helped by an expanding population, the airport began to grow its numbers and developed a much broader network. In the late 1990s and early 2000s, as congestion grew at Los Angeles International Airport, new airlines like JetBlue began coast to coast service from Ontario, affirming the decision.
Secondary airports saw capacity decreases
In 1998 a completely new terminal complex was completed and, with runways of 10,000 and 12,000 feet, LA/Ontario Airport saw a bright future as a viable alternative to LAX. But from 2007 onwards, when fuel and then economics became major concerns, the airport experienced a stark reversal.
When airlines began to reduce capacity, seats disappeared from every airport, including LAX and San Francisco International Airport (SFO), with the effects on Oakland, San Jose, Burbank (BUR) and Orange County (SNA) far more drastic. But Ontario has taken by far the biggest hit.
Traffic at LA/Ontario International Airport: 2004 to 2010
Source: Ontario Airport
But more important than an actual decline in numbers is the fact that Ontario's share of the market in and out of the entire LA Basin has declined as well, as is shown in the following chart.
LA Basin traffic change: 2005 to 2010
|
Airport |
2005 pax |
2010 pax |
2010 traffic as proportion of 2005 traffic |
|---|---|---|---|
|
61,489,398 |
59,069,409 |
96.1% |
|
|
Ontario |
7,213,528 |
4,812,006 |
66.7% |
|
5,512,619 |
4,461,217 |
80.9% |
|
|
9,627,172 |
8,633,452 |
89.7% |
|
|
Total |
83,842,717 |
76,976,084 |
|
|
Ontario's share of total |
8.60% |
6.25% |
The airport has lost a full third of its seats since 2005 and figures for the first half of 2011 indicate a continued slide. More troubling is the fact not only has the overall available capacity declined but that the airport now only has a 6.25% share of that smaller regional total; as opposed to 8.60% six years ago.
The downturn is exacerbated by the fact that the communities east of LA, home to many of the airport's constituents, have been especially hard hit by unemployment, reducing incomes by far more than is true in the more affluent oceanside areas to the west. Burbank and Orange County have also seen declines but the drops are far more modest.
Dominated by Southwest
The airport has also come to be far more dominated by a single carrier, Southwest. Southwest now provides over 50% of the seats. The top 10 airlines account for almost all capacity, which indicates the loss of some carriers.
Top 10 airlines at LA/Ontario International Airport
|
2005 rank |
% |
2011 rank |
% |
||
|---|---|---|---|---|---|
|
49.19% |
53.22% |
||||
|
8.30% |
8.69% |
||||
|
America West |
7.34% |
8.28% |
|||
|
7.22% |
Alaska |
6.07% |
|||
|
5.84% |
Skywest |
5.97% |
|||
|
Alaska |
4.33% |
5.66% |
|||
|
3.89% |
5.08% |
||||
|
Skywest |
3.42% |
4.08% |
|||
|
Northwest |
2.56% |
1.43% |
|||
|
2.39% |
1.30% |
||||
|
Share for top 10 |
94.48% |
99.77% |
|||
|
Passengers |
6,815,060* |
3,430,427^ |
|||
While the passenger figures are yet to be finalised for 2011, the airport expects the total to lag even that of a disappointing 2010.
Time for a change?
Observers of the airport and local politicians are getting quite testy, suggesting it may be time to sever ties with LAWA, believing that the agency is favouring LAX and penalising ONT.
Ontario City Councilman Alan Wapner has been especially critical of the connection and believes the link with LAWA is no longer benefiting his city. At a recent meeting he said, "By LA controlling it, basically they're controlling their own competition, and certainly there are those out there saying that's why LA wants to control Ontario, to artificially increase the prices, to push traffic back to LA."
LAWA counters that the pricing and fee structure at LA/Ontario International Airport is a result of the obligations incurred during the expansion and building of the 1990s, which are ongoing even though at present the new facilities are underutilised and far too big for the traffic.
Smaller, but with Southwest and UPS
A LAWA spokesperson also noted that with the presence of Southwest and the very substantial presence of UPS, which operates a major package and freight operation at the airport, there is no real threat to the survival of the airport.
LAX congestion may revive Ontario's importance
As with Oakland and San Jose in the Bay Area, the long-term fate of Ontario may be closely tied to the increasing congestion at LAX, forcing operators to seek an alternative in order to avoid gridlock at the main gateway. Like San Francisco International Airport, LAX has no possibility of expansion and a finite capacity - making dispersal of traffic a necessity at some point.
Time and a slowly developing recovery may eventually validate the wisdom of those investments of 1998. The question at hand is how much time will be allowed for that to occur.