LA WATCHDOG-2014 was a banner year for the Los Angeles International Airport as a record 70.7 million passengers travelled through LAX, including 19 million (27% of the total) very profitable international travelers who helped fuel record tourism revenues for the City and our regional economy.
LAX is also the world’s leading origin-and-destination airport and the country’s second busiest airport now that we have surpassed Chicago.
Operating Revenues also exceeded $1 billion for the first time as LAX experienced record levels of Landing Fees, Building and Land Rentals, and In-Terminal and Off-Terminal Concession revenue. Operating profit before interest and depreciation was $527 million, a 19% increase from the previous year.
LAX has also recorded other successes over the last several years, including new leases with its major airline customers, the modernization of the Tom Bradley International Terminal, the renovation of five other terminals, the replacement of the Central Utility Plant; and the master lease with Westfield for the operation of the concessions in the individual terminals.
With these successes under her belt, Gina Marie Lindsey (photo above), the Executive Director of Los Angeles World Airports (“LAWA”), just announced her retirement as of this spring, stating that it is “an appropriate time for a transition” and that the “next LAWA executive director will be able to take the Airports Development Program through its next major phase, its next round of projects that will last at least 10 years.”
The key to LAX’s intermediate and long term success is quality management which is why Mayor Eric Garcetti needs to hire a world class Executive Director with the necessary industry, organizational, financial, and political experience to develop and implement a strategic plan that recognizes the strengths, weaknesses, and competitive position of our international airport.
Our new Executive Director will oversee $7 billion LAX Modernization Program, making sure that it is on time and on budget. This includes the construction of the $1.5 billion midfield concourse, the completion of the Bradley Terminal expansion, and the $4 billion ground transportation plan that includes a people mover that connects the terminals with the Crenshaw line and the consolidated car rental facility.
There are also issues relating to the airport’s deteriorating parking structures and roadways in the Central Terminal Area that need to be addressed.
The Executive Director will also be responsible for maintaining LAX’s excellent credit rating, not an easy task since LAX already has $4 billion of long term debt.
The Executive Director will also have to navigate through a minefield of competing interests, including, but certainly not limited to, Homeland Security; the Federal Aviation Administration and the other Washington agencies with their myriad of rules and regulations; the Congress, including its all-knowing committees; the State of California and its many agencies and rules and regulations; the City Council; the Mayor and his staff; and all the special interests that roam City Hall.
LAX also needs to recognize that it cannot burden the passengers and the airlines with excessive fees and rents which may result in the loss of tourists and business travelers to more efficient airports who would love to eat our lunch.
Likewise, while the City is prohibited from using LAX as an ATM because of federal rules and regulations, it nevertheless billed LAWA $93.3 million for “services such as construction and building inspection, fire and paramedic, police, water and power, and certain administrative expenses.” But some of these expenses may have been padded, including costs relating to LAPD that are being protested by the LAX police union.
At the same time that Mayor Garcetti is searching for a new Executive Director, he should consider three other actions.
The first is to sell Ontario International Airport so that the City can focus its attention on the efficient operation of LAX and not be distracted by the litigation and politics involving Ontario. An independent airport serving the Inland Empire may also result in more vibrant regional air transport economy and help relieve the congestion at LAX.
Garcetti should also consider replacing the politically appointed Board of Airport Commissioners with experienced individuals who have the capability to provide value added advice and oversight.
Finally, Garcetti should mandate that LAX establish better relationships with the surrounding communities, including Westchester whose homeowners voted overwhelming for Garcetti because of his promises to protect their neighborhoods from airport related traffic and future encroachment by the airport.
Turning LAX into a world class airport will be long and arduous process, complicated by the lack of available land, the serious limits on funding, and its location in a densely populated area with politically active residents.
Nevertheless, LAX, its Executive Director and management, its Board of Commissioners, and the City need to focus on operating an efficient, passenger friendly airport to better serve Angelenos and our thriving world class tourism industry.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected].)
Vol 13 Issue 11
Pub: Feb 6, 2015