Business Update with Mark Lacter

Should Ontario be able to buy its airport from L.A.?

The city of L.A.'s Los Angeles World Airports has been operating Ontario Airport since 1967, and it's still considered an important peg in the long-running effort to regionalize the SoCal airport system. Trouble is, passenger traffic has plunged almost 50 percent over the last two years - partly because of the recession, partly because of high landing fees, and mostly because passengers don't want to schlep out there. Of course, Ontario city officials don't quite see it that way. They believe their airport has been getting short shrift from LAWA, and they would like to take over the operations. So the L.A. City Council is ordering a study on the economic value of divesting Ontario from the LAWA system. From the Daily Breeze:

"Ontario airport served 4.88 million travelers in 2009, down from a peak of 7.2 million passengers in 2007, according to LAWA's figures. Passenger volumes have dropped so dramatically that portions of Ontario airport's twin terminals have shut down, despite a major $270 million expansion completed in 1998 that allows it to handle up to 10 million travelers annually."

With LAX in the midst of a modernization effort, the assumption has been that the airport would raise its landing fees to the point where some carriers would take a second look at Ontario. But for many of us, Ontario is practically in another state, and the airlines are not about to invest heavily in a place no one wants to drive to. Remember Palmdale? (BTW, the promo above says that Ontario is "only miles from downtown L.A." Yeah, like 38 miles.)

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