Cramped LAX Losing Pacific Rim Carriers to Newer Airports.

Since 2000, LAX has lost 12% of the seats on its weekly international departures, while other major U.S. gateways posted gains in service to foreign destinations.

While Los Angeles officials and residents spent the last decade and $150 million arguing about how to modernize LAX, San Francisco built a cavernous, $1-billion international terminal. The 6-year-old facility is more than twice the size of the 22-year-old Tom Bradley International Terminal at LAX and has twice as many gates. It boasts floor-to-ceiling windows, restaurants and boarding-area seating for hundreds of passengers.

LAX officials say they realize they must build new facilities before the scales tip and San Francisco becomes the airport of choice for carriers serving foreign destinations.

"The strategy for us is that we're ready facility-wise, so we do not lose our share of some of the Asian markets," said Samson Mengistu, acting executive director of Los Angeles World Airports. "When we were in China, they were telling us they may have 200 to 300 million Chinese people in the next 10 years flying internationally. We need to be able to compete and get a fair share of that growing market."

The city's airport agency began a $723-million update to the Bradley terminal this year, but it won't be done for three years and will not enlarge the building, industry watchers note.

Meanwhile, San Francisco officials are aggressively marketing their international terminal to carriers in hopes they can lure business travelers who currently connect on flights at LAX to the Bay Area.

"We really want to be the airport of choice for business travelers, especially those going to Asia," said John Martin, the San Francisco airport's director. "We have a geographic advantage being an hour closer than Los Angeles."

LAX does have some advantages, including better weather than San Francisco and considerably lower fees. At LAX, airlines pay about $6 per boarded passenger, compared with about $14 in San Francisco -- a consideration for the cash-strapped industry.

LAX also served twice as many international travelers last year. But it has been losing ground in the Asian market to San Francisco since 1998. That year, San Francisco had one flight to Asia for every three from LAX. Last year, the Bay Area facility boasted one flight to Asia for every two at LAX.

Airlines are paying attention to San Francisco's growth potential. Qantas is boosting its service at San Francisco from three flights a week to five starting next month -- by taking two Boeing 747-400s that currently serve LAX four times a week each and moving them up north.

"It was always our intention to grow our San Francisco service," said Wally Mariani, a senior executive vice president at Qantas, adding that the airline is also enjoying gains in passengers at LAX, where it is one of the largest international carriers.

Start-up carriers also are increasingly choosing between Los Angeles and San Francisco, which offers half off its landing fees to airlines providing nonstop flights to new international markets. Jet Airways recently announced that it will fly this fall from Mumbai, India, to Shanghai to San Francisco, pending U.S. approval.

"The Bay Area has a slightly larger Indian population than we do, but in terms of air freight, we're much larger," said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. "We have to get more aggressive in telling them this is where the business is."

Officials agree that one of the deciding factors for international carriers choosing among LAX and other airports is likely to be their readiness for the world's largest aircraft, the Airbus A380, expected to start service next year. Some industry observers said Airbus' decision to take the 555-seat plane on its first U.S. test flight next month to New York instead of Los Angeles, as company executives promised last year, reinforces continued frustration with LAX's aging infrastructure.

By the end of this year, LAX plans to have two terminal gates that can accommodate the aircraft. San Francisco has six. And some carriers say they will not be satisfied with the remote gates on LAX's western edge.

"We're looking at San Francisco," Qantas' Mariani said, "and any other airport that will be able to handle the A380 at any gate, without any fuss."



Competing for passengers

The number of seats on international flights departing from Los Angeles International Airport has fallen by 12% since 2000. Some other major U.S. facilities have seen increases.

Number of seats on international flights per week *

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