Los Angeles discusses local control for Ontario airport

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The cities of Los Angeles and Ontario are engaged in negotiations over the possibility of local control for Ontario International airport, following nearly six years of traffic declines at the facility.

Ontario is focused on wresting control of the airport that bears its name from Los Angeles World Airports (LAWA), who has owned the facility since 1985 and managed it since 1967, while Los Angeles maintains that it has worked to maintain and boost service at the medium-size airport in the face of a harsh regional economic reality.

The discussions come after a local judge forced Los Angeles to address the control issue by denying its request to dismiss a lawsuit brought by Ontario.

“Things were at issue, as they say,” says Andre Cronthall, a partner at SheppardMullin who represents Ontario in the suit.

Ontario claims that traffic at the airport fell more than 40% to 4.3 million passengers from 2007 to 2012 due to neglect by LAWA, in the suit it filed in June 2013. It also cites high airline fees, which are about $13 per passenger, as contributing to the decline in traffic.

LAWA highlights economic factors, changes in the airline business and ExpressJet’s short-lived independent operations from Ontario International for the slump in traffic since 2007, on a website it created called “LA/ONTario – The Facts”. It also notes that traffic has decreased 15.5% at medium-size airports across the USA, based on US Department of Transportation (DOT) data.

The operator also counters Ontario's costs argument saying that it has reduced airline fees by more than 20% during the period.

"Los Angeles World Airports is committed to positioning Ontario today to prosper upon the Inland Empire's return to economic vitality," says LAWA.

Cronthall and LAWA decline to comment on the status of the discussions.

Los Angeles and Ontario have until the end of January to reach an agreement before a status hearing with a Riverside court judge on 5 February.

Cronthall says that this is not a hard deadline and that discussions could continue after the hearing.

Representatives of the city of Ontario decline to comment while discussions are on going, preferring Cronthall to speak for them.

Ontario’s plan to rebuild traffic at the airport is nebulous.

A January 2013 business plan by the Ontario International Airport Authority, which include representatives from the city and other local jurisdictions, identifies airline cost reductions and increased air service as the authority’s two main goals.

It aims to achieve the cost reductions through implementing best practices, streamlining functions and reduced staffing, and increasing air service through aggressive marketing, building community support and introducing incentives for new service.

Recovering traffic may not be as easy as marketing and incentives.

Medium-size airports across the USA have almost uniformly suffered from traffic declines during the past decade as airlines have consolidated and focused more resources on large hub airports, as LAWA indicated on its facts page. Those that have bucked the trend tend to be located in areas with high income or business growth, for example Austin, Texas.

Even Southwest Airlines, the largest carrier by passenger numbers at Ontario, has shifted its focus to large airports from medium-size ones in recent years. The Dallas-based low-fare carrier has cut routes to and from smaller airports, for example Oakland-Reno, and announced plans to exit some markets entirely, notably Jackson, Mississippi, in 2013.

This comes as Southwest continues to grow at larger airports, acquiring six new slot pairs at New York LaGuardia from American Airlines in December.

“[Ontario] is not saying that it will be easy,” says Cronthall. “They believe they can get there.”