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selecta · Member Joined: 24 Dec 2006 Posts: 813 Location: ORD

Cramped and old, LAX is losing international flights to newer airports

Cramped facilities push Pacific Rim carriers to newer airports.

By Jennifer Oldham
Times Staff Writer
February 23, 2007
source

Eight times a week, travelers arrive at Los Angeles International Airport after a long journey from Sydney, Australia, eager to stretch their legs and spend money at tourist attractions, hotels and restaurants.

These visitors, about 380 a day who spill out into the sunshine from Qantas Airlines flights and make Southern California their destination, stay in the area three weeks on average, according to the U.S. Department of Commerce. They contribute $183 million a year to the region's economy.

Come next month, Qantas will be taking these flights, and their multimillion-dollar economic benefit, to San Francisco, although its other 42 weekly flights from Sydney and elsewhere to LAX will continue.

The move is just one example of a little-noticed shift in lucrative international air service away from crowded LAX to newer facilities in San Francisco, Las Vegas and New York. 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.

Economists blame the shift on LAX's cramped and outdated terminals and lawmakers' inability to agree on a plan to modernize the airport while other cities have built gleaming new concourses. And newer, more fuel-efficient aircraft give carriers more choices of cities to patronize.

The trend is alarming local officials, who say San Francisco International Airport may soon eclipse LAX as the highly coveted premier gateway to the Pacific Rim. This could endanger the $4 billion a year that international visitors pump into the Southland's economy.

"Everyone assumed that LAX as a gateway would be there by the very fact that it's in L.A.," said Michael Collins, executive vice president of LA Inc., the city's convention and visitors bureau, which has received $33 million from the city's airport agency since 2001 to stimulate travel at LAX and Ontario International Airport.

"The issue that we're wrestling with is that the options for carriers — the choices they have now — are virtually twice as many as they had in 1995," Collins said. "The intensity of the competition has really increased."

For several decades, airlines plied international routes from their biggest hubs. Now, with the help of fuel-efficient aircraft, they're just as likely to favor smaller cities and different routes. For example, Korean Air started flying nonstop last fall from Seoul to Las Vegas, bypassing LAX. (The carrier still has LAX service.) This trend is expected to accelerate when new aircraft with longer ranges come into service in the next few years.

Many large airports around the U.S. are already enjoying record spending by international travelers, at least some of it at LAX's expense.

Since 2000, service from LAX to Tokyo has plummeted 33%, for example. United Airlines slashed one out of every three nonstop weekly international departures, while more than doubling service at hubs in Denver, Chicago and Washington.

Travel wholesalers who plan itineraries for overseas groups say LAX's outmoded facilities are increasingly prompting operators to bring U.S. tours through other cities. Jeff Karnes, regional vice president at New World Travel, said major improvements in such airports as San Francisco's and Las Vegas' have "definitely had an impact on L.A. being their first choice as a West Coast gateway."

Not everyone is unhappy with the decline in international business at LAX, particularly critics who want to see the facility's growth limited, if not reversed.

"The bottom line, as far as the general residency are concerned, is that they are very happy to see as many flights go elsewhere — the more the merrier," said Roy Hefner, a Westchester resident who is on an airport committee that studies noise and other issues.

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."
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Nimish · Posted: Mon Feb 26, 2007 4:06 pm Post subject:

It's no surprise that SFO is gaining more service than LAX, there's no way that anyone can compare the 2 airports and not come away impressed with SFO.