Some Shuttles See Bookings Fall Despite LAX Car Rules
Tight security and more restrictions on private cars would seem a boon to the operators of airport shuttles, taxis and limousines. But with fewer passengers flying after last week’s terrorist attacks, some local transportation providers said their businesses are hurting.
SuperShuttle International Inc., the largest shuttle operator at Los Angeles International Airport, said its bookings are off 25% this week despite new restrictions banning private cars from the central terminal area indefinitely.
The company, which serves more than 20 airports around the country, lost $3 million in revenue last week after the unprecedented shutdown of the nation’s airports following terrorist attacks in New York and Washington. With many Americans afraid to return to the skies at present, the company has gone from projecting a small profit this fiscal year to a loss of up to $5 million.
“The airlines are the engine,” said Brian Wier, president and chief executive of Phoenix-based SuperShuttle. “As they go, so go we.”
SuperShuttle already has laid off 500 of its 3,000 workers nationwide because of the sudden drop in revenue. Wier said the company is seeking compensation as part of any federal bailout package for the nation’s airlines.
Before last week’s attacks, more than 100,000 vehicles a day came into LAX, about 60% of them private cars. Airport officials won’t say how long the ban on personal vehicles will last, but they are encouraging more people to use public transportation or privately owned carriers.
But transportation company owners, such as Roger Moradi of L.A. Xpress Shuttle, said their businesses have yet to recover from last week’s plunge.
Moradi said his company’s sales dropped 85% last week after the Federal Aviation Administration grounded all flights and LAX was closed. He said revenue has recovered somewhat since the airport reopened and flight schedules are getting back to normal. But with people still scared of flying, he said his bookings are still running only about 60% of normal despite the indefinite ban on passenger cars.
In a business with thin margins, Moradi said the dramatic loss of revenue has forced him to lay off 40% of his 100 employees. He said the trend toward tighter security at all airports may help the shuttle industry over time--if companies can hang on that long.
“People still need to travel . . . and I believe we will survive and do well,” Moradi said. “But in the short term, I’m losing my shirt.”
It’s not just the loss of bookings that is bedeviling Bob Shamlo, owner of Los Angeles-based Dynasty Limousine. He said security has gotten so tight at LAX that his drivers have had to double the time they take to make a pickup--eating into profitability because more time means fewer runs per day.
“It has affected our business dramatically,” Shamlo said. “We used to be able to arrange a curbside pickup in 10 minutes. Not anymore.”
Transportation companies aren’t the only ones hurting. Wally Park, a privately held parking lot near LAX, says it is seeing only about half the cars this week that it normally would, said assistant manager Diego Ramirez. He blamed the falloff in air travel in general as well as information put out by LAX management promoting its own parking lots as the main drop-off points for passengers.
“They are just advertising their own lots,” Ramirez said. “It’s affecting us big-time.”
Not all airport-related businesses are faring poorly. Ruth Kardashian, owner of Skycar Inc., said her limousine service got hammered like everyone else’s last week. But she said restrictions on private vehicles and general confusion at LAX has helped boost her business. At 6 a.m. Tuesday, she said she received 30 calls for service, compared with 15 at that hour on a normal day.
“People are thrilled that we’re able to go directly into the airport” and drop them at the curb,” Kardashian said. The restrictions “have helped us a lot.”
Orange-based Southern California Coach also is seeing a surge in business to LAX, said Paige Kisow, general manager of the shuttle service.
On a typical Monday, her company gets about 130 to 150 bookings to drop off or pick up passengers from LAX. On that day this week, the firm received 200 calls.
“People don’t want to take their cars,” Kisow said. “They are afraid of the hassle.”
SuperShuttle’s Wier doubts his company will see such a quick rebound in its LAX business even with the new restrictions on private vehicles. He said the company plans to negotiate a reduction in fees it pays to LAX, which totaled more than $2 million last year.
LAX spokeswoman Gail Gaddie said she is unaware of any discussions about dropping fees for airport vendors such as shuttle operators, particularly when the airport is urging the public to use their services.
“With no private cars allowed [in the central terminal area], the need for their service is greater than ever right now,” Gaddie said. “It should be giving them more business.”
