AS LAX STRAINS, OUTLYING AIRPORT CAN’T LURE ENOUGH FLIERS TO NEW TERMINAL
While Los Angeles International Airport is bursting at the seams and awaits a possible $12 billion expansion, Ontario International Airport has a new $270 million terminal that on many days resembles a ghost town more than a bustling travel center.
In fact, in its first full year of operation, the new terminal served a jump in Ontario’s passenger volume of only 2 percent, to about 6.6 million people. By comparison, when Orange County’s John Wayne Airport opened a new terminal 10 years ago, passenger volume rose about 10 percent in the first year.
That leaves Ontario Airport operating at two-thirds of its current capacity of 10 million annual passengers; at its current rate of growth, it would take at least 15 years to near that figure.
What’s more, a marketing campaign aimed at boosting passenger traffic at Ontario is months away. And a policy of diverting traffic from crowded LAX to spacious Ontario may be next to impossible to implement.
All this has disappointed concession operators and local business boosters in Ontario, who are growing impatient.
“We were led to believe that a new state-of-the-art terminal would lead to an immediate increase of somewhere between 7 percent and 10 percent in the number of people boarding planes,” said John Thomas, general manager of CA1 Services Inc.’s Ontario Airport concessions. “That was in the bid documents sent out by the airport, and it’s what we based our bid on. The reality has been a severe disappointment, to say the least. Our sales do not justify the rent payments guaranteed in the contract.”
To save costs, Buffalo, N.Y.-based CA1 which operates 12 food concessions at Ontario has laid off about half of the 240 employees it started with when it entered into the contract around the time of the terminal opening.
Airport officials, experts and observers say a combination of factors has kept the lid on passenger volumes at Ontario, despite the new terminal:
-Ontario remains hard to access for the region’s highest-propensity air travelers, most of whom live on the Westside.
-Thanks to a lack of competition on many routes, round-trip fares from Ontario can sometimes cost hundreds of dollars more than at LAX, prompting even those who live nearby to travel an hour or more to LAX to catch flights.
-Landing and terminal fees have jumped to finance the new terminal, and those increases have been passed on to travelers in the form of even higher fares.
-Ontario Airport remains an often-unknown entity to many travel agents and passengers from the East Coast, who are often presented with only one option: LAX.
-There are virtually no passenger hubs or international operations at Ontario, which would likely bring dozens of connecting flights and millions more passengers.
That last drawback is about to change, though. On June 3, Air Canada will begin daily operations from Ontario Airport to Toronto.
In conjunction with these flights, Los Angeles World Airports, which operates both Ontario and LAX, plans to launch a $400,000 marketing campaign. Dubbed “Ontario to Ontario” (Toronto is in the Canadian province of Ontario), the campaign will be run by local P.R. powerhouse Rogers & Associates.
A more comprehensive marketing campaign could get under way a month or two after that. Airport officials are conducting a domestic air service study to determine which cities are prime markets for flights to and from Southern California.
But these efforts are too little, too late for Ontario Airport boosters.
“We should have had a comprehensive marketing plan years ago,” said Debbie Acker, an aviation marketing and public relations consultant and board member of Friends of Ontario Airport, who is also a candidate for the Ontario City Council.
“For example, in 1998, Orlando (Fla.) Airport made 111 marketing presentations to air carriers,” Acker said. “Ontario Airport officials wouldn’t tell us how many they have made (since the new terminal opened). I can guarantee you it was nowhere near that many.”
Airport officials say they couldn’t market the airport before the new terminal opened.
“The airlines had to see the new terminal up and running a number of months without any problems before we could really go ahead and market the terminal and airport,” said Nancy Castles, spokeswoman for Los Angeles World Airports. “All you have to do is look at the opening of Denver Airport a couple years ago, with all of its baggage-handling problems. That’s not when you want to be marketing an airport.”
Despite the lack of marketing to date, Ontario Airport is in the midst of adding six daily flights, which at the industry average plane-load of 70 percent capacity, could add about 140,000 annual passengers and boost Ontario’s passenger growth rate into the low 3 percent range.
At the end of last year, TWA added an Ontario flight to St. Louis and Northwest Airlines added one to Minneapolis. Earlier this year, Delta Airlines added an Ontario flight to Atlanta and Southwest Airlines added two: one to Sacramento and the other to Nashville.
But the rest of the 11 commercial air carriers serving Ontario have held off on adding flights; officials with those airlines say they won’t add service until they see a substantial increase in passenger demand.
But, one air travel expert says, this points up a vicious cycle that makes spurring growth at Ontario a major challenge.
“The airlines say they need more passengers to justify adding flights,” said Michael Armstrong, senior aviation planner with the Southern California Association of Governments. “But what does it take to get more passengers to an airport? Competition among the carriers that brings down the fares and increases the frequency of flights. It’s a classic chicken-and-egg problem and it’s why mid-sized airports like Ontario always have a problem competing with major airports like LAX.”
With Ontario stuck in this kind of slow-growth rut and hovering near two-thirds capacity, it would seem logical for airport officials to divert some flights from crowded LAX to Ontario, especially since the same operator runs both airports.
But Los Angeles World Airport officials say federal law prohibits them from setting up any financial incentives for the airlines to shift flights to Ontario. They point to a case three years ago at Lehigh Valley Airport in Pennsylvania, which used financial incentives to lure a second airline to the small airport to lower fares and boost passenger traffic. The original airline serving Lehigh won a federal court injunction against the airport and the second airline was forced to suspend service; it eventually filed for federal bankruptcy protection.
“This really ties our hands when it comes to financial incentives like landing-fee discounts or tax breaks,” LAWA’s Castles said. “All we can do is encourage and cajole the airlines.”