Airline Threatens to Ground LAX Project Unless City Pays Up

Further escalating a public feud, American Airlines has threatened to cancel a $77-million terminal improvement project at Los Angeles International Airport if the city does not pay millions of dollars in rent credits that the airline says the city owes.

American Airlines says former Mayor Tom Bradley’s Administration agreed to reimburse the airline $40 million for improvements to public space at LAX. But Mayor Richard Riordan’s airport representative, Ted Stein, recently told the air carrier that the city had made no such agreement.

Stein made the comment after the airlines filed a lawsuit against the city, challenging its decision to drastically increase the landing fees charged to airlines.

American Airlines says it will not begin work on the terminal unless the city compensates the company for its work.

“The loss of 400 construction jobs and more than $17 million in spending with local minority-owned firms will be unfortunate,” the airline said in a letter to the city.

Riordan called on the company to produce any agreements reached with the Bradley Administration.

“Threats of stopping construction and eliminating jobs in these tough economic times will not be tolerated,” Riordan said in a statement. “My Administration will not be bullied. We will act in the best interest of the people of Los Angeles and not the airline industry.”