GLOBAL ROLE: Overseas flights added $82.1 billion to the local economy, but the facility has not remained competitive.
By Art Marroquin
Overseas flights at Los Angeles International Airport contributed $82.1 billion to the regional economy and created 363,700 local jobs last year, but the aging facility needs some serious upgrades to remain competitive, according to a study released Wednesday by the Los Angeles County Economic Development Corp.
The bulk of that revenue - nearly $73 billion - came from products exported to Europe and Asia aboard passenger flights leaving LAX, according to the study.
About $3 billion came from spending by overseas tourists who visited the Los Angeles region in 2006, while an additional $6billion was generated by airport operations.
"These are colossal numbers," said Greg Freeman, the study's author and vice president of the Economic Development Corp.
"International flights from LAX are how we reach the world, whether it's by fashion or biomedical products or other items," Freeman said. "LAX really is the loading dock for businesses that are exporting to the rest of the world."
An average overseas flight traveling round trip from LAX every day added $623 million annually and sustained 3,120 direct and indirect jobs in Southern California, according to the study.
"That's an average of almost $2 million a day per round-trip flight," Freeman said.
The LACEDC conducted the study to demonstrate the impact of LAX on a region spanning from San Luis Obispo to the Mexican border, Freeman said.
While most large airports have rebounded from the economic devastation to the airline industry following the Sept. 11, 2001, terrorist attacks, LAX has been slow to recover, according to the study.
The number of passengers on overseas international flights arriving at LAX has declined 8percent, from 11.4 million in 2000 to 10.5million last year, according to the study.
Airport officals had not received a copy of the report until late in the day and would not comment until they have a chance to study it, airport spokeswoman Nancy Castles said late Wednesday.
If Los Angeles had kept pace with growth experienced at other airports, there would have been nine more daily overseas flights at LAX, resulting in an additional $5.6 billion in regional revenue, the study said.
"We need to do something to regain the international flights we have lost since 9-11," said Gary Toebben, president and CEO of the Los Angeles Area Chamber of Commerce.
"Nine flights and over $5 billion is too much money for this region to lose," he said. "We have to figure out how to recoup those losses."
The LACEDC said some of those losses could be made up by quickly upgrading LAX to remain competitive. If not, international carriers scheduled to start using the Airbus A380 and the Boeing 787 might look elsewhere to land the super-size aircraft.
"People think, 'This is Los Angeles, where are the international flights going to go?,"' Freeman said. "The benefits we've had from tourism are no longer a guarantee. With the next generation of large aircraft, it is clearly allowing the airlines more options for what markets they are going to serve."
LAX is slowly undergoing a series of modernization projects on a scale that hasn't been seen since new terminals were built at the airport in preparation for the 1984 Olympics.
A $723.5 million renovation of LAX's Tom Bradley International Terminal is under way, along with a $330 million project to improve safety at the airport's southern runways. A contract is expected to be awarded by theof the year to build a consolidated car rental facility.
Last month, the Los Angeles City Council signed off on a $1.2 billion plan to build the Midfield Concourse adjacent to the Bradley Terminal. The project calls for building 10 new gates large enough to handle the Airbus A380 and the Boeing 787 by January 2012.
But those projects might not be completed soon enough to keep LAX competitive, according to Frank Clark, executive director of the LAX Terminal Equity Corp., which represents the airport's international carriers.
"I think Los Angeles has the ability to improve its market share if it shows that it's making a genuine effort to modernize the airport," Clark said. "If LAX can't demonstrate that a significant effort is being made, international flights will be sent elsewhere."
LAX is already losing its grip as the West Coast international hub as airports in San Francisco, Phoenix and Las Vegas are looking to become major players, Clark said.
Earlier this week, officials at San Francisco International Airport unveiled plans to add 14 gates as part of a $250 million renovation of its old international terminal.
The project, aimed at better accommodating mega-size airplanes, is scheduled to be completed in about two years - much sooner than the new Midfield Concourse at LAX.
Additionally, San Francisco airport officials are offering significantly reduced landing fees for airlines looking to launch international flights.
Meanwhile, Korean Air launched nonstop service to Las Vegas for the first time last year.
It's unclear how those flights have affected LAX, but Asian tourists are clearly bypassing the City of Angels for the gambling and glitz offered by Sin City, according to Clark.
"These are tourists with a lot of money who would have normally stopped in Los Angeles for a few days before going on to Las Vegas," Clark said. "But now, they don't even need us."