Why Upset a Giant Revenue Generator? : Tilting the balance between the city and air carriers won’t help the region’s economic recovery.

We in the airline industry are sincerely troubled that Los Angeles Mayor Richard Riordan and his advisers seem to be getting (and then giving the public) inaccurate information on airport issues. Los Angeles International Airport is far too important an asset to the city and the national transportation system to be thrown into divisive conflict by misinformation and political posturing.

The airlines have never “run” the airport. There has been a cooperative spirit between the industry and airport management that has resulted in LAX being one of the most efficient, best-run airports in the nation--projects and expansions have been undertaken based on demand, not bureaucratic desire. This is a record of success, not failure.

The Department of Airports has controlled the airport since its inception. Airlines have no control over the LAX operating budget or the agency’s capital budget; airlines cannot “vote” to block airport projects. While certain terminals are occupied by one carrier, others are controlled by the airport, which can pull a carrier’s space on 30 days’ notice (in contrast to San Francisco International Airport, where carriers have 30-year leases on their gates.) Finally, and most important, airlines do not have a vote on the Airport Commission, which has always made and will continue to make every decision on airport operations.

The airline industry has never been subsidized by the city. It is more accurate to state that the airline industry and its passengers and shippers have subsidized the city. LAX has been built over the years by the airlines, concessionaires and their customers. The city’s small initial capital investment in the airport was paid back generations ago, with interest. Rather than continuing to disparage the city’s leaders of the past who struck such an advantageous deal, the current mayoral staff could look at the city’s accomplishment in working with the airline industry to develop one of the nation’s premier airports at no cost to the city. This contrasts with the high taxpayer costs of the new Convention Center (which will need the airlines’ help in bringing to L.A. the convention business to make the center successful). The annual contribution of the airline industry to the Los Angeles area’s economy exceeds $17 billion, including the salaries of 32,000 men and women employed by the airlines, and the industry generates more than $800 million per year in state and local taxes. What happens to the airlines also affects the thousands of Southern Californians who earn a living building airplanes, radar and air-traffic control systems and playing host to the millions of tourists and business people who the airlines bring into Los Angeles each year.

Riordan is quick to compare the landing fees at LAX to those at New York airports, but he would be hard-pressed to find Californians who have the slightest interest in emulating New York City’s track record. Over the last decade, corporations have fled New York, taking thousands of jobs with them, because the cost of doing business in New York City is too high. Now California is suffering the same problem. It is doubtful that the people of Los Angeles are clamoring for higher fees and taxes, but that is apparently what Airport Commission President Ted Stein has in mind for users of LAX. In fact, on a recent radio call-in show, he accused a caller who voiced concerns that rising fees could mean higher air fares of being a “shill” for the airlines.

LAX landing fees generated $24 million in 1992. The tripling sought by the commission would produce $74 million in annual revenue. The airlines and other users of LAX are justified in questioning what is to be done with the additional $50 million.

The airlines serving Los Angeles want to work with the mayor to maintain the city’s role as a major center for air commerce. The people of Los Angeles will benefit through economic growth that will create new jobs and business opportunities. If I were an unemployed Los Angeles resident, I’d be upset that 400 construction jobs won’t be created because the city is reneging on its agreement with American Airlines for renovation of Terminal 4. The last thing the city or the airlines needs is to destroy their record of cooperation and accomplishment in developing Los Angeles International Airport.