Opinion

Tuesday, Aug. 19, 2008

Dan Walters: Fewer flights slow airport expansions

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Airline traffic dropped sharply in the aftermath of the Sept. 11, 2001, terrorist attacks on New York and Washington. One of the ancillary effects was to relieve pressure that had been building on California airports to expand aircraft and passenger capacity.

Expansion projects in San Francisco, Los Angeles, Orange County and San Diego were running into stiff opposition from environmentalists and anti-noise activists.

The decline – from 179 million passengers going through California airports in 2000 to 159 million in 2002 – was almost welcome news to airport managers and their political overseers.

Air traffic began to rebound in 2004, however, and climbed to a record 183.6 million passengers in 2007, according to data collected by the state Department of Transportation. This renewed the pressure to expand capacity.

Suddenly, the trend may be reversing again, thanks to a sharp economic recession, rising air fares, extra charges for baggage and other services, and financial turmoil in the airline industry, much of it stemming from rapid increases in its fuel costs.

Airlines are cutting flights and even eliminating service to communities, especially smaller ones. But even the big boys are being hit. Los Angeles International, which handles a third of the state's airline passenger traffic, is expecting double-digit drops in flights and available passenger seats, while Ontario, also owned by the city of Los Angeles, is bracing for a 37 percent decline in flights.

The traffic declines at LAX, Ontario and other California airports are hitting their bottom lines, because operational and debt service revenues depend on how many takeoffs and landings and how many passengers the airports handle.

"We have increasing operating expenses like any other organization," Gina Marie Lindsey, executive director of Los Angeles World Airports, told the Los Angeles Times in justification of a decision to sharply increase landing fees for commercial aircraft.

The question, of course, is whether increasing such fees during a time of declining traffic could persuade airlines to eliminate even more marginal flights and thus put airport finances in a downward spiral.

The syndrome, too, raises a question about Sacramento International Airport's decision to push ahead with an ambitious, $1.27 billion terminal upgrade over objections of airlines that the increased fees needed to finance the project are coming at a bad time. Oakland International has postponed terminal expansion due to the traffic decline, but Los Angeles and San Francisco airports are upgrading their terminals.

There's a multibillion-dollar question that no one can answer: Is the current decline another temporary phenomenon, like the post-Sept. 11 drop-off, or a permanent shakeout that will end the era of cheap, mass air travel and make it, once again, a more elitist activity with fewer passengers paying higher fares?