By Dan Weikel and Hailey Branson-Potts
August 6, 2015
Now that Ontario has regained control of its airport in a deal struck with Los Angeles, the small Inland Empire city faces a substantial challenge to revive a struggling facility that has lost more than a third of its passengers since 2007.
The sale agreement announced Thursday could also have ramifications for regionalizing air traffic, a legal mandate to spread some of the growth in passengers from busy Los Angeles International Airport to other commercial airfields in the Los Angeles Basin.
Los Angeles World Airports, which operated Ontario as well as LAX and Van Nuys Airport, is required to pursue regionalization under a 2006 court settlement that ended a lawsuit challenging the airport expansion plans of former Mayor James K. Hahn.
There has been considerable controversy surrounding whether Los Angeles has met the goals of regionalization. Since the 2006 settlement, LAX has gained market share while other airports have lost some.
We benefit when Ontario grows….It relieves some of the air and car congestion around our airport. – Mayor Eric Garcetti, Los Angeles
“This transfer advances that regional aviation strategy,” Los Angeles Mayor Eric Garcetti said at a news conference Thursday. “We benefit when Ontario grows….It relieves some of the air and car congestion around our airport.”
Under terms of the sale agreement, officials said Ontario will pay Los Angeles $190 million over 10 years, assume $59.5 million in debt and provide job protection for 182 employees. The deal will also settle a lawsuit brought by Ontario two years ago in its attempt to wrest control of the facility from Los Angeles.
The payment is far less than the $400 million to $475 million that Los Angeles officials had sought during earlier negotiations with Ontario. But officials say the amount will substantially reimburse Los Angeles World Airports, the current operator, for investments made in the airport — a condition of the deal.
The settlement must be approved by city councils and airport commissions in Los Angeles and Ontario, as well as the Federal Aviation Administration. The process will take about a year.
“Together we’ve reached a deal that will benefit everyone,” Garcetti said. “I am thrilled that we can stop litigation and focus on a partnership that expands Southern California’s commitment to superior air travel.”
Once they obtain control of the airport, Ontario officials say, they will take steps to rebuild passenger volumes and lower the now-high cost for airlines, which put the airport at a competitive disadvantage.
They include streamlining the staff, eliminating a $9-million annual administration fee collected by Los Angeles, more aggressively courting airlines and replenishing a marketing and advertising budget that was slashed in recent years.
To read expanded article, click here.