Airbus has hit turbulence recently as it puts the finishing touches on its new A380 super-jumbo jet amid production delays and ballooning costs. But for Allan McArtor, chairman of U.S. subsidiary Airbus North America Holdings Inc., there is hope on the horizon. Qantas Airways is set to begin flying the 555-seat behemoth by early 2008 between Melbourne and Los Angeles International Airport which Airbus expects will be the No. 2 worldwide hub for the jet when six other carriers begin landing the A380 in Los Angeles over the next few years. Many airports have begun making improvements to accommodate the jet's 261-ft. wingspan, and LAX plans to spend $53 million in upgrades in part for the A380. However, McArtor says those improvements will only carry the airport over the next two years, with the jet maker backing a plan to make additional improvements that would create more A380 landing gates in Terminals 2 and 3 on the north side of LAX. That plan, however, could mean another increase in landing fees from carriers as well as opposition from nearby residents, who already are weary from the hundreds of flights the airport handles each day. But with air traffic worldwide estimated to double over the next two decades, McArtor believes the City Council needs to begin upgrades soon or LAX will lose its status as and the economic benefits of being a hub for international air traffic. McArtor met last week with reporters and editors of the Business Journal, and what follows is an edited transcript of that meeting.


Question: Why do you think LAX should spend money to upgrade its facilities to accommodate the A380?

Answer: Many of the major carriers are the ones that want to bring their flagship A380 airplanes into LAX. It's projected to be second only to London's Heathrow Airport with the highest concentration of 380 operations. That's where the carriers want to fly. And it is one of the major commercial nodes around the globe. Now L.A. can continue to be the crown jewel in that or not. Currently, L.A. is prepared to handle A380 operations for the first two years. The risk is that after the first two years, the next carrier that wants to come in here will be told they will be put at the remote terminal. The carrier may say, 'No, I'm not going to put that kind of airplane into L.A. for that kind of service.' And they will take that capacity into some other airport. That's to your community's detriment if they make those kinds of choices.


Q: If remote terminals are unacceptable, what can LAX do to accommodate A380 traffic beyond the first two years?

A: There is an opportunity with Terminal 2 and Terminal 3 to put two to three to four gates in those terminals and to link it in with customs and immigration not the best, but better than busing passengers to and from remote terminals. There's a lot of unused capacity in some of the terminals on the south side of the airport, so you need to move some of the domestic carriers to other available spaces and try to keep your international flights at facilities that can have customs and immigration. But even if they upgrade T2 and T3 with all the improvements we're suggesting, they've only met capacity for the current A380 orders through 2013.


Q: So what is the long-term solution?

A: L.A. is constrained by its boundary fences, so you have to figure out a way to make maximum use of LAX and to improve the infrastructure that's already there. As a long-term solution we believe they could put a series of A380 gates on the west side of the Tom Bradley International Terminal because nothing exists there now. But in order to do that, you have to move a north-south taxiway. It will take some time because there are a lot of things you have to do.


Q: These suggestions won't exactly be simple projects. Is it really necessary to put this burden on the airport and the community at this time?

A: Modernizing running airports is tough because you've got people coming in and out every day. But you've got to get started with it sometime. And unfortunately this community, for one reason or another, hasn't had the drive or the courage to do this since the Olympics in 1984. So it's behind and it's time to get moving.


Q: Is it excessive to make all these upgrades for one plane?

A: These improvements need to be made for (all the new) long-range airplanes, not just the 380 airplanes Boeing's 747-800 and its 777-300. And the same thing goes for T2 and T3. You've got to have gates that are capable of taking long-range, long-wingspan, long-turn radius airplanes.


Q: Won't this be costly?

A: The overall modernization of the terminals is a cost that the airport as part of its overall service to its customers has to be committed to. The change in the gates is a fraction of that cost. And these projects get funded out of increased landing fees, concessions and all the other things that pay the bills at airports.


Q: As a European company, what sort of an impact does Airbus have on the U.S. economy and, more specifically, on L.A.'s?

A: Last year we spent over $10 billion in the U.S. For the A380, half of the airplane is procured in the U.S. the components come out of the U.S. And in the L.A. basin we've got about 100 suppliers.

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