High Hopes For Ontario; Airlines Offered Lower Fees To Add Flights

In a bid to spur more passengers to use LA/Ontario International Airport next year, officials want to offer airlines temporary incentives to start new service at the airport.

Long touted as a more convenient alternative to LAX, high landing and terminal rental fees, which airlines often pass along as higher ticket prices, have stymied growth at the airport.

The new plan, which would waive landing fees at the airport for six months for new domestic flights and 12 months for international flights, is still in the preliminary stages but could be in place by January, said Mark Thorpe, director of air service marketing for Los Angeles World Airports.

Lower operating costs could also translate into cheaper tickets for travelers.

"It's something we've wanted for a number of years," Thorpe said. "We realized that other airports around the country have been offering incentives like this for some time now. And we realized that if we wanted to compete we'd need to offer incentives too."

OPERATING COSTS

Landing fees at Ontario are $2.42 per 1,000 pounds. For a typical airplane, the cost is several hundred dollars per landing, Thorpe said. The cost at LAX is $3.34 per 1,000 pounds.

Even so, Ontario's terminal rental fee is the highest in Southern California, resulting in a higher overall cost of operating for airlines.

Had the incentives been in place last spring, for example, ExpressJet Airlines - which began operation at the airport with 29 daily flights - could have saved hundreds of thousands of dollars during its first six months there.

Thorpe said the airport also considered offering incentives in the form of marketing and advertising for new flights.

"Airlines really like airport costs abatements because it means they'll have a lower operating costs," he said. "But airports like to do marketing and advertising, because it's much more likely that the service will succeed."

But temporary landing fee reductions may not be enough to drive in significant new service, said Alan Bender an airline business expert and professor with Embry-Riddle Aeronautical University.

"Judging from the last 10 or 15 years, the results are a mixed bag," he said. "In no way is this a slam dunk."

Bender said fuel prices and competition with other airlines sometimes dwarf the importance of airport incentives.

"Airlines are still going to look at the advantages of being at LAX," he said. "If the traffic doesn't materialize, the carriers are going to go away anyway."

Los Angeles city officials voted last December to change the name to LA /Ontario International Airport to emphasize its proximity to Los Angeles and clear up any confusion with its Canadian counterpart.

During the first six months of the year, traffic at the Ontario airport remained largely unchanged, despite the launch of ExpressJet. Earlier this year both AeroMexico and Azteca airlines dropped flights that represented more than half of Ontario's international routes at the time. And ExpressJet recently announced it will end flights between Ontario and Louisville, Ky., on Nov. 30. The airline also canceled flights to Corpus Christi, Texas, at the beginning of October.

Kristy Nicholas, a spokeswoman for ExpressJet, said incentives are a small piece of what airlines use to determine where to start new service.

"Incentives definitely play a role, but there are numerous other things we look at, including traffic and competition," she said. "We really want to stay out of the line of direct competition."

WATCHING CAREFULLY

Meanwhile, the nearby San Bernardino International Airport, which hopes to launch its own passenger service in the coming year, is watching the Ontario airport carefully.

The fledgling airport, on the grounds of the former Norton Air Force Base, has been touting itself as a cheaper alternative for commercial airlines.

Don Rogers, the San Bernardino airport's interim director, said lower prices at Ontario could diminish his airport's ability to compete.

"I don't know how significant the incentive is," he said. "To be meaningful it would have to be a long duration. We believe that our facility, because of the cost of construction, will be a low-cost operating facility for the long term."

The San Bernardino airport is amid a $38 million renovation of its terminal building in hopes of attracting a commercial carrier.

Bender said the incentives the Ontario airport is proposing are too small to have much of an effect on San Bernardino's chances.

"For thousands of people, San Bernardino will be more convenient," he said. "And for an airline, there's going to be less competition there."

Reach Josh Brown at 909-806-3074 or jbrown@PE.com

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PASSENGER TRAFFIC AT ONT

First six months of the year:

2007: 3,463,570

2006: 3,457,602

0.17 percent growth

SOURCE: LOS ANGELES WORLD AIRPORTS


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