Wednesday, September 30, 2009

Ontario International Airport (ONT/KONT) Forcast Bleak Passenger Numbers

For the first time since 1988, a decade before two multi million-dollar terminals were built , fewer than 5 million travelers are expected to use Ontario International Airport,according to a forecast from the airport.

The twin terminals that opened in 1998 at a cost of $270 million were built to ultimately handle 10 million. Loftier expectations from decades-old regional forecasts had the airport growing even more, to 30 million passengers by 2025.

The recession, felt intensely in the Inland region, is partly to blame, experts say. Airlines, responding to a drop-off in travel by spending-wary Americans, have continued to cut the number of flights offered and planes used nationwide. As airlines have cut back, or moved out of Ontario Airport, the ones left have shouldered higher fees and higher rents. Fares have risen.
Airport officials expect 4.83 million passengers to use Ontario by the end of 2009. In 2010, the airport expects a slight increase to 4.9 million, a figure that may be optimistic, according to one airline expert.

“They’d be very lucky to get that,” said Michael Boyd, an aviation consultant. He’s forecast that airlines nationwide will cut back their seats by another 4 or 5 percent in 2010.
No matter how much Ontario would want to increase its service, and Boyd thinks the airport’s managers are “doing everything right,” it’s unlikely an airline would be willing considering the current economic conditions, he said. “It’s not magic. ‘Let’s go find another airline,’ ” he said., “There isn’t one … there’s no airline store.”

‘SPECIAL TREATMENT’

Of the 100 largest airports based on passengers, Ontario Airport lost the largest percentage of travelers in the nation in the first half of 2009, compared with the same six months in the prior year, according to statistics from OAG Aviation Solutions.

Experts agree the recession has had a bigger impact on the Inland region, where the housing industry fueled rapid growth and quickly imploded. Travelers have also sought cheaper fares that don’t exist at Ontario, said Jack Keady, an aviation consultant in Playa Del Rey.
Keady said Los Angeles World Airports, the Los Angeles city agency that owns and operates LAX, Ontario International Airport and Van Nuys Airport, could use some of its muscle to encourage growth at Ontario. If an airline wanted another gate at LAX, officials could agree to the terms as long as flights are added to Ontario, Keady said.

“They always need favors, they always need special treatment,” he said of airlines.
Ontario is one of the most expensive airports in Southern California to do business, costing airlines about $14.50 per passenger, based on fees and rents levied. By comparison, as of March, Palm Springs International Airport cost $4.07 per passenger and Long Beach Airport cost $5.34.
Officials have raised landing fees and terminal rental rates for the current fiscal year, adjusting for lost revenue from airlines that departed the airport entirely and those that cut flights.
In September 2008, ExpressJet ceased operations at the airport and JetBlue ended its only once-daily flight. ExpressJet had started flying multiple routes from the airport in April 2007.
“This is not a good time to be raising fees, unless you want to go bankrupt,” said Darryl Jenkins, an aviation industry consultant and former aviation professor at George Washington University in Virginia. “You’re just going to send people scrambling elsewhere.”

Recently, San Bernardino International Airport approved a plan to offer up to $2.5 million worth of incentives to the first four airlines that give their brand new terminal its first scheduled passenger flights. The airport has also offered free landing fees for the first five years the airlines do business in San Bernardino.

REGIONAL SERVICE

San Bernardino County Supervisor Gary Ovitt, whose district includes Ontario Airport, said that airport still remains a more viable alternative for airlines.
Ovitt said he’s met unofficially with airport staff asking how they could make it more affordable for airlines to land there and reappraise their landing fees. “Hopefully we’ll see some action in that regard,” he said. Mary Jane Olhasso, economic development director for the city of Ontario, said it’s been frustrating watching passenger numbers plummet each month when compared with the same month a year prior.

“They are not putting any more money into marketing,” she said of Los Angeles World Airports. “Therefore, the regionalization plan is not being implemented.”
In a lawsuit settlement between LAX and its surrounding cities that objected to expansion plans at the Los Angeles hub because of potential environmental impacts, Los Angeles World Airports agreed to encourage spreading air traffic among the other Southern California airports.
“We kind of put (regionalization) on the back burner and a little bit of focus went to LAX,” said Maria Tesoro-Fermin, spokeswoman for Ontario International Airport. LAX was losing traffic too, she said, so increasing passengers there was “regionalization” in and of itself.
Efforts to “re-energize” the airport agency’s office of regionalization and air service development are afoot though, Tesoro-Fermin said.

The airport has hired a consultant to spearhead efforts that, for now, focus on linking Ontario Airport and Anaheim with a shuttle to encourage Disneyland visitors to fly into and out of Ontario. “It’s time to put Ontario back on that front-burner,” she said.

(Kimberly Pierceall - The Press Enterprise)

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