Ontario stays quiet about bid
Liset Marquez, Staff Writer
Created: 01/30/2011 07:01:26 AM PST

ONTARIO – A proposal for the city to regain control of LA/Ontario International Airport has been given to Los Angeles World Airports, but city officials are not forthcoming about just how it would work.

The plan is the culmination of months of work and it addresses the city’s desire to not only take back the reins of the airport from LAWA, but also alter the language on joint-powers agreement between the city and Los Angeles.

What is clear, according to Councilman Alan Wapner, is that with an elimination of the administrative fee charged by LAWA and the reduction of employees at the airport, Ontario could be successful in decreasing the $67 million operating budget at the airport by at least 20 percent.

At the same time, that cost savings would reduce the cost-per-passenger at ONT and encourage airlines to expanded its flights there.

Wapner said they expect a response from Los Angeles and LAWA officials in the next couple of weeks.

It could bring resolution to a more than year long battle between the two agencies and ahead of July 1, the city’s self-imposed deadline to regain control of ONTt.

It also represents a significant change in a roughly 40-year agreement between the two cities.

While the agreement’s original intent was to aid in the operation of ONT, it now stands as a conflict of interest for the city of Los Angeles, said Wapner, who confirmed that the city does “have a plan, but we can’t talk about it publicly because it is part of negotiations.”

What officials have discussed publicly is their criticism of LAWA, saying that the governing body has been trying to court airlines to LAX at the expense of ONT.

For the past two years, passenger traffic at ONT has fallen more than 47 percent. LAWA reported the airport served 4.88 million travelers in 2009, down from a peak of 7.2 million passengers in 2007.

“I don’t want to divulge too much information when we’re competing with other agencies,” Wapner said.

LAWA has also decided to seek expressions of interest from the public and private sector to manage ONT.

Ontario officials began to push LAWA to relinquish control because they felt the future of ONT was in jeopardy, he said.

Wapner said Ontario’s plan does propose terms of transfer and need to change the language in the joint powers agreement.

“The reason the airport is not successful is because of high costs. The only way to work is to immediately eliminate the 15 percent administrative fee that is tacked on the operating budget,” Wapner said.

The move alone could reduce the costs of operation for an airline, anywhere between $4 and $4.50 per passenger, he said.

The cost per enplaned passenger is $14.50 and with that reduction, it would bring ONT fees lower than LAX’s rate of $11 per passenger, Wapner said.

Wapner said the rates – when compared to other airports that are about ONT’s size – keep the airport from being competitive and attract the right amount of flights and airlines.

“We’ve got to be competitive and bring in lower cost carriers,” he said.

They will also work with Los Angeles to decrease the amount of staff, and, at some point in the process, Ontario would bring in its own staff because Los Angeles has “prevailing wages so we can’t lower the rates,” he said.

In the meantime, City Manager Chris Hughes will continue his discussions with LAWA officials while Wapner said he has had positive discussions with the Los Angeles City Council and airport commissioners.

But there is one scenario Wapner said he wants to avoid.

With modernization projects on the horizon, LAX’s debt service is expected to increase, which means their rates could also significantly rise, Wapner said.

If rates at ONT stay the same, low-cost carriers might decide that neither of the airports are viable options and opt to leave the market, he said.

“Which is why it is important because Ontario is an unconstrained airport physically and politically,” Wapner said. “Other Southern California airports will not be able to serve the needs of aviation in the region like Ontario.”

San Diego, he said, is near capacity and is not planning to build any new airports.

“We know the need is there but not help,” he said.

Since Ontario first made its efforts public, numerous reports and data on the state of the airport have been released by city and LAWA officials.

Ontario officials have received support from several regional transportation agencies on their endeavor.

Los Angeles County Economic Development Corporation sent a letter to Los Angeles’ city administrative officer, Miguel Santana. The three-page letter cited reasons for the need for change, but was also weary of what any other manager of ONT can do differently.

“There is certainly no guarantee that lowering costs (and increasing marketing activities) at ONT will automatically yield more air service,” William Allen, president and CEO of the corporation, wrote in his letter to Santana.

Ontario could look no further than neighboring San Bernardino International Airport as an example on how to operate an airport.

The SBIA, which has no passenger service, is a joint-powers authority comprised of San Bernardino County and the cities of San Bernardino, Colton, Loma Linda and Highland.

Formed in 1992, the SBIAA Commission oversees the aviation portion of the former Norton Air Force Base of about 1,300 acres, said Bill Ingraham, SBIA’s executive director.

Ingraham said SBIA doesn’t take any county funds and is self-sufficient.

“(But)they need to look at number of different alternatives before they decide,” he said.

Ingraham said he is also concerned about the significance of the airport’s future.

“Ontario needs to survive for our airport to succeed,” Ingraham said.

Ingraham said the ongoing battle at ONT and the decline in traffic has not affected the SBIA facility because there isn’t any civilian airline presence.

We’re “starting from zero,” he said. “The culprit is the economy. I understand where Ontario is coming from and the high costs.”

If LAWA does decide to turn over control of the airport, it must first get the approval by the Federal Aviation Administration, said Ian Gregor, communications manager, FAA Western-Pacific Region.

Just how long that process would take is unknown.

The timeline for approval can vary from case-to-case, he said.

“The FAA’s role in the transfer of an airport from one operator to another is limited to ensuring that the new operator has all the personnel, equipment and procedures in place to ensure the continued safe operation of the airport,” Gregor said.

Brett Snyder, author of the blog crankyflier.com, said there are many benefits to having Ontario control their local airport.

Typically, local cities along with the help of their convention and visitors bureau engage in discussions with airlines in an effort to attract them to their local airport.

“They need commitment from businesses that will support flights to say a city like Oklahoma to get new service and the airlines are not seeing it,” Snyder said.

Snyder, who has been in the aviation industry for several years, said he is not sure how difficult it might have been for LAWA to effectively promote ONT or if the distance was a factor.

“For Ontario, they can draw their traffic, certainly they can do a better job,” he said.

But getting flights is one issue, another concern is who Ontario will get to help operate the airport on a day-to-day level, Snyder said.

“There are a lot people in the industry who are not qualified to do so,” he said, adding that airports today have to operate like a business.

“It’s a matter of finding the right people to hammer down the costs,” Snyder said. “You need someone to take real action.”

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