Drop in Air Traffic at LAX Eliminates Hard-Fought Gains

The war in Iraq and the mysterious SARS outbreak drove down air traffic at Los Angeles International Airport in March by 8% compared with the same period a year ago, and officials worry that business could continue to fall in the coming months.

The March decline erased hard-fought gains in air traffic at LAX from September through February. Like other airports around the country, LAX has been struggling to recover from the Sept. 11 terrorist attacks.

Air traffic at LAX, already at a six-year low, is likely to continue to suffer as the facility heads into summer, officials said.

An early look at domestic airline schedules for May shows that carriers will reduce the number of seats available to passengers at LAX by 9% compared with May 2002.

The drop in seats on domestic flights reflects a continued effort by airlines to stem economic losses that have buffeted the industry since the skyjackings.

International carriers aren’t faring much better.

The number of travelers passing through Tom Bradley International Terminal at LAX fell 10.2% last week compared with Feb. 9-15 -- the week before the war in Iraq began -- according to an informal survey conducted by the city’s airport agency.

A falloff in passengers after health advisories warning people to stay away from Hong Kong and parts of China to prevent the spread of severe acute respiratory syndrome, or SARS, prompted many Asian carriers at LAX to slash flights.

Passenger traffic on jets flying to Asia continues to be down by as much as 70% on some carriers because of SARS. Some travelers report that jumbo jets are leaving the nation’s largest gateway to the Pacific Rim with as few as 50 people on board.

Looking toward summer, many international carriers have put on hold any plans to add flights at LAX in hopes the situation will improve. “The airlines have dropped fares significantly to induce people to travel in Europe and that might help, but for Asia it’s not helping at all,” said Frank A. Clark, executive director of a nonprofit corporation that represents international carriers that operate at the Bradley terminal.

Travel to Europe from LAX has started to pick up in the last week, although it is still fairly depressed, Clark said.

The downturn in passenger traffic at LAX could hurt parking revenue, but should not damage airport finances overall because city officials can offset losses with the airport’s cash reserves, said Paul Haney, an airport spokesman.

Parking receipts represent 14% of the airport’s total revenue, with the remainder composed of funds not affected by the decline in air travel, such as guaranteed income from airport shops and restaurants and terminal rents, Haney said.

Despite the gloomy travel outlook, LAX is in a relatively good financial position compared with those of other airports. It does not rely on any single carrier for revenue and has little debt, said Kurt Forsgren, a director at Standard & Poors.

“We recently put a credit watch with a negative outlook on the Toronto Airports Authority and we didn’t do it because of SARS, although that was contributing factor,” he said.

“The airport is already facing a weak environment as a result of the bankruptcy of Air Canada, and it has a lot of debt and is eating through cash. That’s not the case with LAX.”