Airport administrators consider Ontario cost-cutting options

Los Angeles airport officials unveiled a list of options Monday for cutting costs and improving management of L.A./Ontario International Airport, which has lost about a third of its passengers since 2008.

The options range from reductions in operating expenses to bringing in a private company or a local government, such as the city of Ontario, to manage some or all of the facility in an attempt to encourage airlines to restore service.

One thing not on the table, however, is the sale of the airport to a private company or a local government.

Los Angeles Mayor Antonio Villaraigosa “is not really interested in selling the airport,” said Gina Marie Lindsey, director of Los Angeles World Airports, which operates Los Angeles International Airport, Van Nuys Airport and L.A./Ontario International. “A great investment has been made in the airport. It is not the best time to sell an asset.”

The options were presented during a meeting of the city’s Board of Airport Commissioners, which hired Jacobs Consultancy to look into ways to lower costs at Ontario.

The proposals are part of a discussion between Los Angeles World Airports and Ontario city officials, who blame the agency in part for the severe decline in passengers, saying they put a priority on remodeling LAX and did not move swiftly enough to reduce Ontario’s costs for airlines.

The number of passengers at Ontario has fallen from about 7.2 million a year at the start of 2008 to about 4.9 million at the end of 2009, largely because of a rise in fuel costs in 2008 and the national recession, which hit the Inland Empire particularly hard.

Further declines have occurred in 2010, and airlines that serve the airport are planning more reductions in the number of seats they will offer travelers later this year.

As a result, the cost per passenger for air carriers at Ontario now ranks among the highest for medium-sized airports nationally and the highest locally.

So far, Los Angeles airport officials say, they have cut Ontario’s staff from 450 to 300 and reduced some operating expenses; they have also been exploring marketing ideas to attract passengers.

“We have worked very hard to attract airlines to Ontario,” Lindsey said. “If Ontario were starved for facilities and LAX was a world-class airport, I’d say the critics were right. But its just the opposite. Ontario has new terminals and plenty of capacity.”

Ontario municipal officials praised Los Angeles World Airports for considering a different approach, such as turning over the management of all or part of the airport to a private company or the city of Ontario.

“Our airport cannot be saved by reducing costs alone,” Ontario Mayor Pro Tem Alan D. Wapner said in a prepared statement. “There must be a recognition that a fundamental conflict exists by Los Angeles World Airports owning and operating competing airports in the current and future Southern California economy.”

The report by Jacobs noted that low costs per passenger do not alone guarantee the success of an airport. Warren Adams, director of the consulting firm, told airport commissioners that Oakland International Airport experienced a steep drop in passengers during the last two years although its costs were lower than Ontario’s.

Adams also said that bringing in a third party to manage airport assets could create an incentive to lower operating costs, but he cautioned that outside management of the entire airport would require a significant investment by the company or government agency, which would be difficult in today’s credit markets.

dan.weikel@latimes.com