LAEDC Issues Critical Report on Mayor Hahn's $9+ Billion LAX Master Plan

Economic impact should be a primary consideration in the development of LAX and our regional airport alternatives. The Master Plan EIR sheds significant light on such impact. The "no growth" and "Alternative D" scenarios, which cap LAX at 78 million annual passengers (MAP), result in regional economic outputs of some $18-20 billion less than Alternatives A, B or C which support 89-98 MAP. While this comparison is not by itself determinative, policy makers and residents need to understand that this factor alone equates to potentially foregoing the benefit of the economic equivalent of more than 500,000 jobs for our future regional economy if Alternative D is implemented and other regional airports fail to meet the needs of travelers and cargo operations (estimated direct passenger and cargo related jobs approach 100,000. With California facing fiscal crisis and future population growth of five million more people in Southern California by 2020, such a plan could lead to economic strangulation. The economic equivalent of half a million jobs equate to more than $1 Billion in annual tax revenues to support schools and governmental services.

The region must not cap its future with a "No Growth" plan for LAX. Market forces and user preferences will determine which airport alternatives in Southern California meet our future passenger and cargo needs. Burbank, Long Beach and John Wayne airports are already constrained or capped. Even Ontario with its substantial expandability has not generated sufficient traffic for Jet Blue, Aloha Air, and Air Canada for their passenger service. Use of our other regional airports for expanded passenger and dedicated cargo operations is a desirable goal. But, any plan which creates a real physical or capped limitation on LAX is unacceptable from an economic impact standpoint. A "planning capacity" is one thing. A legal or physical cap is something else. The goal of a distributed regional airport system is something everyone can support. But any plan must be flexible enough to address changing market forces and the traveling publics' ultimate choices of air service and airports.

Getting to the Airport

The concept of capping MAP can be misleading. Today's capacity limitations are not the number of flights our airports can accommodate; they are the number of passengers current modes of ground transportation can move to and from our airports. If the number of ground trips can be reduced and the number of passengers per ground trip increased, capacity can be improved and congestion can be reduced.

LAX is physically constrained today by the limits of ground access to move passengers and cargo to and from the airport via Century and Sepulveda Boulevards. Alternatives to improve this "connectivity" include:

1. Expansion of direct light rail service eliminating the multiple transfer issues currently extant on the Greenline. (Rail service could also incorporate a pre-check in flyaway service component discussed below).

2. A satellite system of dedicated "flyaway" bus service to LAX (and other regional airports) with pre-checked baggage service.

3. Remote check-in options outside the Central Terminal Area. (CTA)

Alternative D proposes the creation of a new offsite Ground Transportation Center (GTC) at Manchester Square adjacent to the 405 freeway, approximately two miles from the Central Terminal Area (CTA). The current parking structures would be eliminated and a new CTA constructed in the center of the airport. Direct truck and vehicle access would be replaced with an Automated People Mover (APM) between the CTA and the GTC. It is unclear at this point whether passengers will be able to check their baggage at Manchester Square or will have to carry baggage through the GTC screening, onto the APM and into the CTA. Alternative D does propose limited flyaway service with direct bus access to the CTA. It also proposes an Intermodal Transportation Center where people can transfer from the Green Line and buses to the APM.

From a ground access standpoint, the option of a remote drop off and check in facility could enhance connectivity to LAX. However, due to its location the Manchester Square site raises unanswered questions regarding bottlenecks and back ups onto the 405 freeway as well as limitations regarding access from other highways and streets in the area. Timing regarding acquisition of the necessary land (200 acres) for Manchester Square is also highly speculative and could delay the project 7-9 years into the future. A site nearer LAX already under LAWA's control such as the Lot C area appears to offer a more viable and flexible alternative.

However, the most immediate and cost effective opportunity to alleviate traffic congestion around LAX is the creation of a world class "Flyaway" system of offsite check-in locations (e.g., Burbank, Downtown, Ontario, Long Beach, Orange County, etc.) where passengers can pre check- in luggage and board high quality dedicated buses designed for business travelers to travel via freeway diamond lanes direct to their airline terminal with their luggage delivered directly to baggage screening for aircraft load on.

Rail and bus systems like this are being used at many other airports including Hong Kong and London, and have now been approved by the TSA for use in Orlando. This option in Alternative D should be the focus of major funding support at this time, not massive irreversible airport reconfiguration. Alternative D will only add a .2 MAP of access capacity at a cost of approximately $5 billion Imagine what $1-2 billion would buy in terms of a network of flyaway options. Not only could flyaway service reduce traffic at LAX, high quality, low cost flyaway service to other regional airports (e.g., from Orange County to Ontario) would also stimulate more passenger interest in the use of other regional airports to further reduce demand on LAX. (One future opportunity if the Anaheim to Las Vegas high speed Maglev system is constructed would be a spur line to Ontario as a dedicated high-speed flyaway service.) Additionally, these flyaway facilities would provide for the ability to disperse traffic to other airports in the region by allowing passengers to leave from one airport and return to another with no concern about where their car is parked. Currently some business passengers are reluctant to use a secondary airport because of uncertainty about their return schedule. Having a network of flyaway services covering the regions' airports would alleviate this concern, promote use of other regional airports and significantly alleviate access congestion to all airports.

Runway Safety

The need for safety enhancements and center taxiways for the South runway complex are already overdue. By completing these improvements now, LAX will be capable of accepting the new A380 Group VI large (600 passenger) aircraft which a handful of international airlines will begin operating in 2007.

However, the massive reconfiguration of the north runway complex, especially the elimination of Terminals 1, 2, and 3 is of questionable value. Heathrow Airport has only two parallel runways yet plans to accommodate in excess of 80 MAP using new Group IV aircraft, suggesting LAX's reconfigured south runways plus one of the north runways should be adequate for LAX.

Elimination of Terminals 1, 2, and 3 to accommodate Group VI international aircraft is a highly questionable trade off, especially when one considers the impacts of reduction in gate capacity and the elimination of low-cost short-haul flights and service provided by low-fare airlines such as Southwest. Short-haul airline traffic is critical to feed LAX's national and international flights. Forty percent of all international passengers using the Bradley Terminal at LAX depend upon short-haul connections. Elimination of short-haul capacity is counter-productive to supporting international flights and service to LAX. SFO learned this when they lost more than 20% of their international flights after the departure of Southwest Airlines to Oakland. Baltimore-Washington International Airport on the other hand has seen a 20% increase in international traffic and a return to pre-911 travel levels due to Southwest Airlines expanding operations there. We need both types of service to be competitive.

Short-haul flights have grown much faster than international flights post 9-11. Loss of low fare service would also cause competitor's fares at LAX to rise. Without Southwest, Denver's commuter fares are some of the highest in the nation. Our region needs low cost airline service to remain economically competitive. Any modernization plan for LAX must maintain the flexibility to serve a changing mix of short-haul and international passenger demand. Unfortunately a change in fixed gates which dramatically shifts LAX capacity to dedicated gates for new Group IV large aircraft will eliminate three short-haul gates for every large aircraft gate created. Should north runway separation ultimately be needed, shifting the northern runway to the north would be the preferable option, not elimination of Terminals 1,2, and 3.

Airport and Passenger Security

Post 9-11, airport security standards are undergoing continuous change. The Transportation Safety Administration continues to review a broad range of threats posed by terrorists. New technologies are under development to address the protection of passengers and facilities. Warnings have again been issued regarding potential hijacking threats even after cockpit cabin doors have been hardened. Now concentrations of people appear to be the preferred target. Security is a moving target and committing now to an expensive, irreversible and radical change in airport passenger operations based on a single threat scenario is not the best strategy.

Alternative D and the SAIC Security Report are based on the premise that car or truck bombs are the primary threat to future LAX operations. RAND on the other hand cites historical evidence that attacks on aircraft and luggage bombs pose a more frequent and greater threat to passengers. RAND also points out the risks created by concentrating large numbers of people in confined areas. Basic security doctrine recognizes that the more geography and facilities requiring protection, the greater the size and cost of the necessary security forces and protection equipment and the greater the margin for error due to the lack of sufficiently trained personnel. Even though Alternative D appears to be primarily focused on protection of airport operations as opposed to passengers, the new passenger access system proposed in Alternative D actually creates three new targets of opportunity for terrorists: The Ground Transportation Center (GTC), the exposed, three-mile long Automated People Mover System (APM) and the new Central Terminal Area (CTA). These facilities not only concentrate passengers as targets, they also present distinct new opportunities to halt LAX operations if damaged or destroyed. A hijacked private or commercial plane could be aimed at the new Central Terminal Area where upwards of 20-25,000 passengers could be transiting on a major holiday, rendering LAX totally unoperational at untold human cost.

When one further considers the potential for 7-9 years of delay due to property acquisition issues, "hassle factors" for passengers and congestion on the 405 freeway, initial screening at the GTC using as yet unproven technology, a two-mile journey on the Automated People Mover System (APM) and yet another final security check at the Central Terminal Area (CTA), and the value, if any, of this added security, major operational reconfiguration of LAX requires further critical evaluation, especially if this huge cost in the early years of the project delays needed improvements for international air travel at the Bradley Terminal.

Air Cargo – A Regional Economic Imperitive

In 2002, air cargo exports from the region reached $31.5 billion in value. Imports were $29.4 billion. Cargo exported through our ocean ports was valued at $30.5, less than that shipped by air. Air cargo service to and from the region is critical to the future growth of our economy. Hundreds of thousands of high-value jobs here depend on just-in-time shipments and deliveries of goods via air. The Southern California Association of Governments projects a tripling of air cargo over the next 20 years, from 3 million tons in 2000 to 8.9 million tons in 2020. Alternative D assumes a growth at LAX from 2.0 to 3.1 million annual tons. The capacity shortfall of 5.8 million tons will need to be accommodated at other regional airports such as Ontario, Norton, March, Palmdale and George, or the business and jobs will be rerouted to Phoenix and Las Vegas. Not addressed in Alternative D are the regional enhancements in ground access necessary to accommodate truck access to and from these regional airports and the thousands of business and retail locations throughout Southern California.

Dedicated cargo carriers such as UPS and EVA have already agreed to operate out of Ontario. Others such as Fed Ex might also be capable of using non-LAX alternatives. However, most of our air cargo currently moves in the bellies of passenger aircraft and this makes it difficult or too costly for airlines to provide cargo operations at a location distant from their primary passenger operations. Alternative D does not address a solution to this problem. It merely limits LAX to 3.1 million annual tons. Alternatives A, B, and C capped LAX air cargo at 4.2 million tons. Either we address the 50-65% cargo capacity shortfall regionally or forfeit the business and related jobs to other regions. (Using the economic data developed by LAWA for the master plan suggests that every additional million tons of air cargo for the region equates to 50,000 additional jobs.)

Consideration of Costs and Benefits

The new Denver Airport was built at a cost of $3 billion, albeit constructed on open land far from the metropolitan area. SFO has been modernized with major new ground access for cars, trucks and now BART at a cost of $5 billion. The Mayor of San Francisco has clearly made expansion of capacity and convenience at SFO a strategic and economic priority for his region. Given the questionable enhancements relative to security at LAX, the downsizing of future gate capacity (from 163 to 153) to impose a 78 MAP physical cap and the added hassle factors for ground access, one must question the expenditure of $ 9 billion dollars for the results to be achieved. As previously noted, for a much lower price tag, a system of remote fly away locations could better address commute times, remote security and reduction of local airport congestion.

LAX today has some of the lowest landing fees in the nation and we must finance needed improvements. The key is to choose the improvements wisely. Due to airline cost per enplaned passenger three times higher than LAX ($6 vs. $18), SFO has not only lost short-haul and international flights, its bond ratings have been lowered twice. SFO has now proposed discounting its landing fees to $12 to attract more carriers and customers. Market forces are always at work and cannot be ignored.