ALAMEDA, Calif. — Southern California’s LA/Ontario International Airport could soon be under new management.
Los Angeles World Airports— the city-owned enterprise best known for running Los Angeles International Airport — announced late Wednesday that it wants to contract out the operations at its other passenger airport, Ontario.
LA/Ontario International Airport, 35 miles east of Los Angeles, serves the Inland Empire region.
Traffic has plummeted since 2008. The airport served 4.8 million passengers in fiscal 2010, a drop of more than 32% from 2008.
LAWA is asking for expressions of interest from those interested in operating and managing Ontario.
It’s not clear if LAWA is willing to consider privatizing the facility under the terms of the Federal Aviation Administration’s pilot-privatization program. LAWA officials could not be reached for comment Thursday.
In their news release, LAWA officials said their goal is to find solutions to better market and more efficiently operate the Ontario facility.
The announcement follows a campaign by the city of Ontario to regain control of the airport. The facility is part of a joint-powers authority created by Ontario and Los Angeles, under which ownership of the airport property was transferred from Ontario to Los Angeles in the 1980s as part of a deal to expand passenger facilities.
In recent years, Los Angeles airport authorities have backed away from efforts to regionalize Southern California air traffic, and have marketed LAX to carriers at Ontario’s expense, said Ontario City Council member Alan Wapner.
“There’s an inherent conflict between the two airports,” Wapner said.
Because of the high overhead charges LAWA imposes at Ontario, airlines now pay more to fly from Ontario than from LAX, he said.
“That is the prime motivator as to why they’ve either moved out of Ontario completely or moved flights to LAX,” Wapner said.
Wapner said the city’s goal, no matter what happens with the expression-of-interest process LAWA announced this week, is to modify the joint-powers agreement to give the city of Ontario management control over the airport.
“We’re not going to let it impede or hinder our effort to return the airport to local control,” he said of the EOI process.
The city would have no problem cutting staff and salaries to bring down overhead costs, he said.
“If Ontario took control, we could immediately cut costs 25%,” he said.
Negotiations are underway and will continue between Ontario and Los Angeles officials, Wapner said.
The cost of operation is the most important factor an airline considers when it picks an airport to serve, especially for a secondary facility like Ontario, said Brett Snyder, a passenger airline industry consultant and author of the Cranky Flier, a travel industry blog.
He agreed with Wapner that operational costs at Ontario could be cut.
“The terminals don’t have much real debt behind them,” Snyder said. “The facility costs aren’t that high; it’s a lot more the operating costs, which is a good thing because you can do more with the operating costs. It seems like operating costs are where the bloat is.”
Ontario International Airport supports about $78 million of outstanding revenue bonds, which carry underlying single-A ratings from all three major rating agencies. Expressions of interest are to be submitted to LAWA on Feb. 28. They represent the first step in what would be a multi-step process, according to LAWA. The results are intended to guide officials in formulating a more formal request for proposals for the management and operation of the Ontario airport.
Regardless of the ultimate outcome of the process, Los Angeles expects to retain ownership of the Ontario airport property, according to the LAWA news release.
