New Flight Plan : Major Changes May Be in Store as Officials Ponder Future of LAX

Struggling to reconcile operating agreements from the 1940s with political realities of the 1990s and traffic demands of the 21st Century, the city is rethinking the way that Los Angeles International Airport looks and works, even who should own and operate it.

The Board of Airport Commissioners last week ordered a $285,000 study of whether to sell or lease the publicly owned airport, the nation’s fourth-busiest, to a private firm that would operate it as a public utility--theoretically, making money for the city.

At the same time, officials are preparing to renegotiate for the first time in 46 years all the basic operating agreements between the airport and the airlines that use it. New pacts may let the city greatly increase landing fees, now among the nation’s lowest.

The airport’s staff, meanwhile, is preparing plans for a massive expansion of the airport, doubling cargo capacity and increasing the size of passenger terminals and the number of parking spaces by more than 40%. A small automated train, or people mover, would tie it all together.

And planners are pondering how the airport will connect with mass transit--both the Metro Green Line, which is scheduled to open in 1994, and a proposed high-speed rail service through the Westside and San Fernando Valley to the Palmdale Regional Airport.

Clifton A. Moore, executive director of the Department of Airports, calls this confluence of change “a major financial and operational turning point” at the city’s largest single asset, a $2-billion property that costs $151.8 million a year to operate.

All of these changes, some merely proposed while others are under way, come at a time when the airport is experiencing the first ripples of a coming tidal wave of growth. As trade around the Pacific Rim rises, activity at the airport is projected to rise along with it.

Cargo volume, for example, is expected to double in a decade, to 2.6 million tons annually, as the airport closes in on New York’s Kennedy International as the country’s busiest air cargo facility. Passenger traffic, meanwhile, is expected to grow 42%, to 65 million people.

The numbers that most worry Mayor Tom Bradley and the City Council, however, are in the city budget. Bradley and Councilwoman Joy Picus have pressed hard recently to sell or lease the airport to a private company to generate income for the anemic general fund.

Federal regulations prevent the city from generating income from airport operations. In accepting federal grants for such improvements as better runway lighting, LAX agreed that all revenue generated at the airport would be used only to operate and maintain the facility.

Proponents of privatizing the airport, such as the Santa Monica-based Reason Foundation, suggest cities would be better off selling or leasing their airports. Cash or lease payments could supplement cities’ lean budgets, advocates contend, while counties would benefit by putting airport lands back on their property tax rolls and the state would have a profitable new corporation to tax.

No publicly owned commercial airport has ever been sold in this country, a Federal Aviation Administration spokesman said. Efforts to make Albany County Airport in upstate New York private collapsed earlier this year in a mass of legal riddles, such as whether airport lease payments could legally be transferred to the county’s general fund.

That may not doom any plan to sell the L.A. airport, though. “I’ve talked to a number of people in FAA and their general counsel’s office, and they say you should not read the Albany situation to reflect FAA’s attitude on (privatization),” said John P. Giraudo, former general counsel to the President’s Commission on Privatization. Now a Washington lawyer, Giraudo has been retained to analyze the legal side of privatizing the airport.

Airlines wonder if a privatized airport, for example, could finance improvements and repairs by the sale of tax-exempt bonds the way government agencies can or whether it would be forced to use a more expensive way of raising capital, which could force up landing fees.

Privatization also would affect federal grants for safety equipment and other improvements. Giraudo said privately owned or leased airports would be ineligible for grants made to publicly owned airports, but a 1982 law lets them accept smaller grants from an FAA “discretionary” fund.

Other issues range from responsibility for costly toxic contamination to the prevention of private airport operators using a virtual monopoly to gouge airlines and passengers.

Most important to L.A. airport officials is the validity of the assertion that privatization would make money for the city. Giraudo said the study ordered Tuesday is an “exploratory” bid to identify the one approach that stands “the most chance of success.”

“Rather than study everything all at once, including things that are unlikely to work, we decided to narrow the search to the one best prospect,” Moore said. “If it appears feasible, then you go into a step-by-step, ‘cookbook’ approach.”

The goal is to estimate what kind of income a privatized airport might legally and reasonably be expected to generate.

“If it is a small number, no one will have any interest,” Moore said. “If it is a large number, I suspect everybody will prick up their ears and really take a serious look at this.”

The size of that number will depend in part on the kind of operating agreements the airport negotiates with its airlines. The agreements, which determine landing fees, among other things, have not been fully renegotiated in 46 years.

Councilman Zev Yaroslavsky and others have long criticized airport managers for the current agreements, which expire next year, because they set landing fees on a sliding scale that is geared to cover the airport’s operating, maintenance and debt-service costs and tied to how much money is collected from things such as parking and concessions.

Other revenue, such as sales at restaurants and parking lots, has kept landing fees low compared to those at other airports. For instance, a 747 is charged $4,451 to land at New York’s Kennedy airport, $3,433 at Chicago’s O’Hare International Airport and $1,155 at the L.A. airport.

Moore defended the system.

“They (current agreements) are a guarantee that you’ll always be able to pay your debts,” he said. “In return, they get some fluctuation in fees.”

Moore, who has worked at the airport for 32 years, acknowledged that contemporary realities might well dictate new terms for the renewed operating agreements, possibly including a return to fixed landing fees.

If those fees were to rise to market levels, Yaroslavsky and others have speculated, the city might legally maneuver airport parking lot revenue out of the control of the Department of Airports and into the city’s general fund. City lots at the airport will bring in $50.8 million this year.

That bounty could grow by 50% as the airport expands to accommodate the considerable growth in cargo and passenger traffic expected by the year 2000. A decision on how to expand is still months away, but the proposal favored by the staff includes 11,900 new parking spaces.

About 7,400 of those spaces would be in a lot at the end of Runway 7, near the intersection of Imperial Highway and Pershing Drive. Another 4,500 spaces would be in an area bounded by an enormous horseshoe-shaped international terminal on the west side of the 3,500-acre airport.

This proposed new 24-gate, 2.4-million-square-foot terminal would be nearly 2 1/2 times the size of the 11-gate Tom Bradley International Terminal, which was celebrated as the nation’s largest international terminal when it opened in 1984.

The Bradley terminal, under the plan, would be used for domestic jumbo-jet flights. Another new domestic terminal with 11 gates for smaller aircraft would be built just east of Sepulveda Boulevard, on airport land now used by United and Delta airlines mechanics.

According to planning documents, the new international terminal should be built at the west end of the airport, half a mile from the closest existing terminal, because there it would not add to the traffic jam of taxiing aircraft already choking operations at existing terminals.

At that location, the new terminal also could be served by the new Glenn Anderson Freeway (formerly tagged the Century Freeway), taking cars off the congested San Diego Freeway. Six of nine proposed cargo terminals would be spread along the southern and western fringes of the airport for the same reason.

The new building would be linked to existing terminals, as well as parking lots and the new Metro Green Line mass-transit service, by a small automated train called a people mover. These trains already tie together terminals at airports in Seattle, Atlanta and elsewhere.

Tying into the Green Line is seen as especially important because that mass-transit service is not designed to run directly into the airport. Instead, to save money, officials at the Los Angeles County Transportation Commission plan to build their airport station more than a half-mile from the nearest airport terminal. Without the people mover, passengers would have to transfer to a bus, then possibly to a second bus, to get from the station to their gate.

Fearful that few passengers would not bother dragging baggage through such a maze, airport officials have asked the commission to devise a better connection between train and plane.

Central to the airport’s strategy is a “transportation center” in what is now Parking Lot C on 96th Street. There, the Metro Green Line would meet the airport people mover at a remote passenger terminal where people could check baggage while transferring between trains.

Eventually, planners speculate, the LAX-Palmdale high-speed mass-transit line also could end there, opening early in the next decade at about the same time the LAX expansion is completed--and the full development of Palmdale Regional Airport begins.

LAX Expansion Proposal

Over the coming decade, the number of passengers using Los Angeles International Airport is projected to increase to 42%, to 65 million people annually, and the amount of cargo is expected to double, to 2.6 million tons. To accommodate this, airport officials are considering several billion-dollar options to squeeze more terminals between the runways.

Here is a look at one of several recommendations under study. It suggests:

1. Building a new international terminal at the west end of the airport, about half a mile from the existing international terminal.

2. Scattering cargo terminals on the western and southern edges.

3. Constructing a small automated train, called a people mover, to connect the new terminal and its parking spaces with existing terminals and their 25,000 parking spaces.

Passenger Terminals Cargo Airline Maintenance Airport Administration Auto Parking Central Terminal Area