Operating agency is hopeful about the future
Liset Marquez, Staff Writer
Created: 01/29/2011 07:07:43 AM PST

ONTARIO – An era of watching LA/Ontario International Airport lose droves of passengers could be coming to an end – at least that’s what officials are hoping for at Los Angeles World Airports.

For the first time since 2008, ONT’s annual drop in passenger traffic is less than what other airports in the region are enduring.

This could be a sign that the city’s sputtering economic engine could be ready for prosperity, according to the agency that operates ONT.

“I think Ontario’s worst years are over,” said Michael Molina, executive director of external affairs for LAWA. “It’s a glimmer of hope.”

Yearly air traffic figures for 2010 show ONT only lost 1.19 percent of traffic from 2009. Last year, 4.8 million travlers passed through ONT. A slight decrease from the 4.86 million travelers in 2009.

The airport’s worst year was 2008 when it saw a 13.5 percent drop in passengers, Molina said.

“What we’re seeing is that 2010 traffic shows things have leveled off at the airport,” he said.

Secondary airports or smaller facilities were hit the hardest during after the recession.

“At Ontario, the biggest hit was at the very beginning of the downturn,” Molina said. “As we endured the recession, I’m optimistic that the worst is behind us.”

But Molina said airlines are moving cautiously and the difference will come down to ridership, adding that the situation in Ontario is not unique.

Mark Thorpe, LAWA’s director of its Air Service Marketing Division, said he works on a daily basis to bring more flights to ONT and Los Angeles International Airport.

“It’s still tough to bring service at ONT because airlines are not looking to grow,” he said.

In 2007, ONT handled 7.2 million passengers. But with an estimated growth of 1.5 percent annually, a new projection shows that the airport won’t see that kind of traffic again until 2040, according to a report released by Jacobs Consultancy in August.

The airport had once been projected to serve 30 million passengers by 2030.

Airports in San Jose and Oakland, which are secondary to San Francisco International Airport, experienced significant decline in passengers in 2010.

San Jose has seen a third of its business go away in the last year, Molina said.

LAWA staffers continuously meet with airlines to recommend routes and slowly return Ontario to numbers before the recession, he said.

As the economy improves and air traffic becomes an option as well as a demand in the Inland Empire, only then will airlines increase flights out of ONT, he said.

“As an airport, that is not going to be a pattern that will continue forever,” Molina said.

Ailing airport

News of the airport’s steady traffic volume is a departure from the years of downturn in ridership, where each month’s traffic figures were worst than the last.

ONT has suffered a 32 percent decline in airline passengers since 2007.

During that time, JetBlue, ExpressJet and Aeromexico have left ONT, while the remaining air carriers slashed service and increased ticket fees as a way to support operations.

As the airport struggled for passengers, Ontario officials voiced their disapproval of LAWA operations.

City officials said they felt not enough had been done to meet the goals of a legal settlement in which LAWA agreed to redistribute air traffic from LAX to other regional airports such as ONT.

The decline in air service at ONT from 2007 to 2009 led to a $400 million blow to the Inland Empire’s economy and the loss of more than 8,000 jobs, according to a report released by Ontario in September.

Based on trends, the Federal Aviation Administration is projecting ONT passengers will reach only 6 million by 2030. In the city report, it states it was a figure “ONT passed in the `90s and that is 17 percent lower than ONT’s passenger volume was in 2005.”

Ontario officials have said that the governing body has been trying to court airlines to LAX at the expense of ONT.

As a secondary airport, ONT would be the normal option for low-cost carriers, but a 2009 survey by Domestic O&D found that Southwest is the only low cost carrier at ONT while all the major low cost carriers now serve LAX.

Since 2003, LAX’s market share has increased from 69 percent to 71 percent.

“In certain times, airlines have to retrench, cut their costs and operational efficiencies until they see a return of traffic. They’ll leave their satellite airport and go back to LAX,” Thorpe said.

Ontario city officials point to the lack of low-cost carriers and high costs to do business at ONT as part of their woes.

It currently costs airlines $14.50 per passenger to do business at ONT, where it only costs $11 at LAX, Councilman Alan Wapner said.

Since ONT’s passenger traffic began to drop Southwest, the largest airline at the airport, has cut services. In 2000, Southwest ranked ONT as the 17th largest airport in the airline’s system. Today, ONT ranks in 28th place, according to the city’s report.

Another cause for concern was the steady drop in marketing the airport, Wapner said.

From 2007 to 2008, Thorpe said LAWA pretty active marketing the airport spending $1 million to $3 million in advertising.

In 2007, Ontario and Palmdale received $2.5 million in marketing and advertising.

In July, the Board of Airport Commissioners approved ONT’s air service marketing budget designating $650,000 for the year.

Thorpe said his department still promotes ONT in the Los Angeles area and in business travel publications.

“At LAX and ONT, there has been a lot of belt tightening and we have to look to do more with less,” Thorpe said. “When we embarked on the modernization project at LAX a lot of the resources had to be dedicated to that.”

Restructuring a plan

But as ONT was reeling from the drop in passengers, officials in Los Angeles started to contemplate their efforts to redistribute traffic.

“The best definition is it’s a work in progress,” Molina said.

The concern from LAWA officials was they felt they were pushing away traffic at a time when they should be working to retain passengers.

From 2000 to 2007, LAX lost 11 million passengers while other airports in the region grew by 6 million passengers.

In 2000, LAX had 68 million passengers and in 2008 the count was 58 million, Molina said.

“Under the traditional definition of regionalization you can say that’s been a success,” he said.

LAWA officials contend they had accomplished the goal of diverting passengers from LAX, but “that’s the part of the definition we struggle with,” Molina said. “Regionalizing air traffic is important, so it’s convenient to the passenger. If you live in Ontario, it makes sense to fly out of Ontario.”

Wapner, who is the city’s liaison for the airport, said LAWA officials don’t understand the goal of redistributing air traffic.

“The focus is to reduce the carbon footprint, improve the environment and improve transportation,” Wapner said. “It isn’t just because LAX reached their traffic.”

If LAWA waits to focus on regionalization until LAX hits 70 million passengers, then there will be no alternative airport and all of Southern California travelers will suffer, Wapner said.

“I don’t think they’ve been pushing the airport successfully,” he said.

The airport was built to sustain 12 million annual passengers and it has been at 4 million annual passengers for a couple of years.

“How long can it continue to sustain itself? You can’t keep the lights on for long,” Wapner said.

But Ken Alpern, who chairs the nonprofit Transit Coalition, has a proposal for LAWA officials.

In a CitywatchLA.com blog post last fall, Alpern suggested that LAX eliminate its proposed expansion of the north runways.

Dubbed the zero option, Alpern said he initially heard about the idea from a friend. The option suggests that LAWA do away with the runways to allow travel at Ontario to expand.

“It’s not one commonly talked about or that has a large amount of following,” he said. “If they are not going to cooperate what choice do we have?”

Alpern said it’s no secret among ground and air transportation experts that there is a “lack of effort” by officials at LAX to expand ONT.

“Everyone hates to use LAX because it messes up ground transportation,” he said.

It’s something Molina can partially agree with.

“People don’t want to drive to LAX to take a flight. We want you to fly to Ontario,” he said.

But Alpern said he doesn’t understand why Los Angeles still doesn’t have a prominent secondary airport.

Other major cities, including Houston, New York and Chicago, have a secondary airport, he said.

“Why are we being forced to use LAX?” Alpern said.

As LAWA officials wrestle with how to define regionalization today, Molina said staffers also seek to refine what regionalization should look like in the next five to 10 years.

“LAWA still believes in the concept of regionalization. Its good for air traffic, it’s good for ground transportation and we’re still committed to it,” he said. “We believe in regionalization.”

And LAWA officials are moving forward with efforts to redistribute traffic by extending the contract of regional air consultant Peggy Ducey, who has 12 years in the industry.

The Board of Airport Commissioners recently agreed to extend Ducey’s contract, paying her $148,000 for the year.

Ducey was first brought in 2009 to help LAWA specifically address the drastic downturn at ONT.

That was the year LAWA announced that the agency was hoping Disneyland would be the magic ticket for declining passengers at ONT. It was Ducey who spearheaded a campaign for the agency to make ONT the airport of choice for Disneyland visitors.

This past July, speaking to the board, Ducey admitted she had heard concerns from officials from Disney as well as John Wayne Airport in Santa Ana, both key components of the plan.

The hesitation, she told the commissioners, was the drop in passengers at John Wayne Airport since discussions of the plan first began.

The Disney proposal is not over, Molina said, adding that Ducey is still in discussions with both parties.

An update on the plan is also expected in the next couple of months, he said.

Her immediate task is to work with LAWA staff on an annual report that thoroughly explains plans for regionalization for the next year. It will be presented to the commissioners next month, Molina said.

She will also be required to work with the Southern California Association of Government on a regional air planning process. In the next year, Ducey must also create a working group to share information, discuss issues of concern and assess progress made toward implementing LAWA’s regionalization program, Molina said.

“LAWA’s goal is to increase passenger traffic at the airport. That’s our mission,” he said of ONT.

Until the recession, the department was doing a good job with the airport reaching 7 million passengers at the peak of traffic, Molina said.

“The numbers plummeted to the current levels and we don’t like it. We won’t tolerate that and we’ve been working extra hard to bring new airlines and additional air traffic,” he said.

Alpern said one solution would be to consolidate or sell one of the airports owned by LAWA.

“It’s a smarter way of doing business,” he said. “It’s the obvious secret that everybody knows.”

But if the city of Ontario is successful in regaining control, there would need to be a “sweetheart deal” to encourage airlines to come in or to make a difference, Alpern said.

Right now, ONT has a competitor in LAX, because the price of flights is so advantageous to the major airport, he said.

“It’s too pricey when you try flying anywhere else,” Alpern said. “City of Los Angeles owns the airports and they have the ability to do a lot.

“As long as you have that you’ll never see increased flights at Ontario.”

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