L.A. Agrees to Let Ontario Have Its Airport Back

Friday, August 07, 2015

It seemed like a good idea nearly 50 years ago—a regional airport system stretching from Los Angeles International Airport (LAX) to Palmdale and Ontario, extending the convenience of travel and local economic advantages of such facilities—and it doesn’t seem like a bad one now.

But “Palmdale Intercontinental Airport,” conceived in the ‘70s, has had to settle for being LA/Palmdale Regional Airport with a smaller vision and, two years ago, new owners when Los Angeles World Airways (LAWA) sold it back to the city of Palmdale.

This week it was Ontario’s turn. With an August 17 court date looming in yet another high-stakes legal fight over the airport, a tentative agreement was reached to transfer it back to Ontario. The deal still has to be approved by the Federal Aviation Administration (FAA) and local agencies.

Ontario sued Los Angeles, LAWA and the L.A. Board of Airport Commissioners in June 2013, claiming the airport was losing business to LAX because legal agreements were being violated. Passenger numbers dropped from 7.2 million to 4.9 million at Ontario during the first three years after the economic crash of 2007. It was down to 3.9 million in 2013.

The L.A. operators blamed the downturn on the recession and changes in the airline industry.

Folks in the Inland Empire (San Bernardino-Riverside-Ontario metropolitan area) have not been happy with LAWA stewardship of the LA/Ontario International Airport for a long time. Los Angeles authorities started managing the airport in 1967 and bought it in 1985.

A long-term planning emphasis on regional disbursement of air traffic, touted but never executed, was of great interest to residents living around LAX who were afraid that a proposed expansion was going to add mightily to their misery. They insisted that a 2006 settlement with LAX include guarantees that air traffic be spread throughout the region.

A report commissioned by L.A. County in 2013 dismissed those efforts as “token.” 

The Southern California Association of Governments (SCAG) forecast in its 2012 regional transportation plan (pdf) that traffic at Ontario could be between 19.2 million and 31.6 million passengers by 2035, depending on population growth.

Ontario proposed in 2010 that the arrangement between the two airports be changed. L.A. would remain the owner and serve as an advisor to the Ontario airport’s board of directors, but would no longer set and manage policy there. Negotiations did not go well and shortly before Ontario filed its April complaint in Riverside County Superior Court, L.A. offered to relinquish the airport if Ontario paid $474.5 million.

Ontario offered to assume ownership in exchange for picking up the airport’s outstanding debt with zero payout beyond reimbursement for expenditures.    

 They finally agreed on Ontario paying $190 million over 10 years and paying off $59.5 million in debt. The deal includes job protection for 182 employees.

The Los Angeles Times reckoned that by the time the deal got done, L.A. Mayor Eric Garcetti had added his support to “more than 130 cities, county governments, state and local elected officials, regional planning agencies and aviation-related citizens groups in Los Angeles, Riverside and San Bernardino counties.”

–Ken Broder


To Learn More:

Ontario Airport: Cost for Transfer Is $190 Million (by Richard K. De Atley, Riverside Press-Enterprise)

Ontario Airport Settlement with LAWA Avoids Lengthy, Costly Litigation (by Liset Marquez, Inland Valley Daily Bulletin)

L.A. Will Transfer Airport Ownership Back to Ontario (by Dan Weikel, Los Angeles Times)

When Airports Collide: Ontario Sues L.A. to Get Back Its Facility (by Ken Broder, AllGov California)

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