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American inks deal for $1.6bn investment at LAX

American Airlines and the operator of Los Angeles International airport have agreed to a $1.6 billion investment to improve the carrier's facilities.

The scope includes a new unified check-in area for terminals 4 and 5, a connection to the airport's planned automated people mover with a new central security checkpoint on the same level, and landside and airside connections between the terminals, American and LAX operator Los Angeles World Airports (LAWA) say in a joint statement.

The investments, which must be approved by the LAWA board, will occur over 15 years with the majority of works complete in seven to 10 years.

“This is a substantial commitment on the part of American,” says Deborah Flint, chief executive of the airport operator. "I’m so pleased that American shares our excitement for the future of this great airport, and wants to partner with us to achieve our vision to create a world-class airport.”

Doug Parker, chief executive of For Worth-based American says: "We are committed to being the preferred airline at LAX."

The deal comes less than a year after Delta Air Lines agreed to invest $1.9 billion in rehabilitating terminals 2 and 3 at LAX, as well as covering the costs of moving nearly a third of carriers at the airport to facilitate its relocation.

The Atlanta-based carrier increased the number of gates it has preferred access to at the airport to 23 from 14 with the move. That, executives say, will allow it to run a more reliable operation as well as enable future expansion.

American has preferred access to 19 gates in terminals 4 and 5 at LAX, plus a remote terminal for its regional operation and access to a number of common use gates in the Tom Bradley International terminal.

United Airlines is now the only one of the big three that has not announced multi-billion investment plans for LAX. The Chicago-based carrier operates from 20 gates in terminals 7 and 8 but is in talks with LAWA regarding preferential access to a possible future terminal 9.

“Today, we don’t have the gates and the facilities – yet – to really grow and compete with Delta, American and Southwest,” said Scott Kirby, president of United, on LAX in March. "The most important part of that is actually ensuring that terminal 9 becomes a facility that is dedicated to Star Alliance and United."

Air Canada, a Star Alliance partner of United, relocated to terminal 6 in May, helping to ease connections between the two carriers at the airport.

American is the largest carrier at LAX with a nearly 20% share of seats in 2016, FlightGlobal schedules show. Delta was second with a 16.3% share, United third at 14.1% and Southwest Airlines fourth at 12.8%.

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