LAWA's New Executive Director Faces Familiar LAX Challenges: Airlines, Community Impacts, Runways

It's an unhappy reality that every major airport in the United States has recovered from 9/11 except LAX. We're not even close. We're talking 6 million passengers down from where we were in the year 2000. Here's our standing in the world: in 2000, we were third in passenger traffic and we were third in cargo. In 2006, we are fifth in passenger traffic and eleventh in cargo. I haven't had the chance to dig down in these numbers yet, but I'll tell you that I read in an Airports Council International publication just two days ago that Denver has overtaken LAX in passengers. I don't know if there's something funny about those numbers. I've got to dig into those, but come on-this is not right.

So let me concentrate not on what the problem is, because you have had a very effective description of that. Let's concentrate on what we're going to do about it. We're in the midst of some projects: the South Runway Complex project is moving forward. Despite the fact that you'll probably thrash me when we're finished, I want to call out Kelly McDowell, the mayor of El Segundo, who took political leadership to be able to make compromise to make that project go forward. That is not an easy thing to do, and we all should be very grateful.

It's not so easy on the north runways, though. We've got a ways to go. It is important that they happen. Here's the deal, from my standpoint on the north runways: When we talk about renovating LAX, we're not just talking about renovating the terminals, although we are going to talk about that. It's also getting the airfield configured for today's fleet. That's what we're really talking about. If we try to run today's fleet through yesterday's airfield, we are on the edge of being within the safety tolerance range, and some would argue that we're outside it. We have the FAA administrator [Marion Blakey] here; I'm sure many of you talked to her or heard her at her luncheon speech. She was saying, "Guys, what don't you get? You've got an old geometry here on your airfield, and you've got to fix it."

We are launched on doing that. We've got NASA Ames evaluating what our options are going to be so that we can safely accommodate today's traffic and tomorrow's traffic on the north airfield. It's going to be a slog. It's going to take a couple years, because once we get the options identified, we've got to do the environmental work and move forward on that.

There's lots of stuff we can do in the meantime. We have, no question about it, outdated terminal facilities. To say they're dog-eared would be kind. That's not just from the standpoint of cosmetics and how they function, but let me be really blunt about the fact that they're about to fall down around our ears. Literally, the theme building, iconic in Los Angeles, is starting to fall down. So we're in the middle of a $10 million renovation project there to try to keep the concrete from falling out of the arches in the theme building.

Well, what do you think is going on with the arteries and veins of the terminals? Those have to be fixed. That's not sexy stuff. It's like getting a new transmission in your car; you still have the same car. But we have to do it. So, we are in the process of identifying the critical infrastructure needs. What are the systems that are likely to fail first, and what do we have to do about it? What do we do to keep these terminals habitable, looking better and functioning better for the airlines that are in them for the next ten years? Because even if today we said that we're going to get rid of half the terminals and start over again, we would be ten years away from making that happen. So we can't continue to stop investment in what we have today. So that's a huge bucket of work.

Then you put that together with the green-light projects that were approved in the master plan and some very creative thought as to how we can make the most out of the central terminal area, because the whole idea of whether we're actually going to go build another airport on the Westside within ten or 15 years is probably something we can't tackle right now. What we really need to tackle is, how do we continue to operate around on the east side of the airport, which is where we've been operating for the last 45 years. There are some great ideas coming forward, and I'm very hopeful that we're going to have some good plans to do that.

We don't have enough passenger processing facilities. You all were very helpful in ensuring that we got good City Council support to move out smartly on the Midfield Terminal, that's great stuff. We do need these new gates for the new, large aircraft, but we also need processing space for the passengers that are going to be coming through. We're working on how we can try to be sure that we get that.

We are on track to deliver those gates to the Midfield Terminal for the new, large aircraft in 2012. We do not have one day to lose.

In that process, we hope to be able to also build a great deal of additional concession space, because you guys, who happily or unhappily may find yourself spending a little more time at LAX than you might have planned on any one of your trips, know we are woefully under-concessioned. That's a big deal from the standpoint of whether you have what you want to spend your time and money on at the airport, but it's also a big deal from the standpoint that we are losing revenues that can help us pay for all of this. All of this that we're talking about is extremely expensive. Additional square feet of concession space right there on the backside of Bradley would be a great thing and a great move forward, but we also need to get better concession space in the existing terminals. So we're going to try to scope all of that. So you put all that together in a big set of projects, try to estimate what they're going to cost, and here are the challenges.

Fixing the airline relationship is a big challenge. We have not been as respectful to the fact that we have multiple important relationships to our future. We have tried to be respectful to the community relationship; that's a struggle. We're going to continue to try to be very respectful to that relationship, because, no doubt about it, this is a regional facility, but we have local impact. So we've definitely got to reinforce those bridges of communication with the local community. We have to spend more time and attention on the airline relationship, because, frankly, they're the guys that are impacted by the airport, and they're largely the guys that are going to pay for it.

So we have a lot of remedial work to do there. We have to dig out of the hole that we've dug, and then we have to forge a path forward to get the airlines to agree. I could sit here and identify a whole bunch of projects that I think we need to do pretty quickly, but we've got to have the airline agreement on those projects, the priority on those projects, and a funding plan for those projects before we can move ahead. So we're going to be working on that very hard.

There's a nuance on the airline issues here, as well. It's unique to LAX, but I think we have a severe case of it, and that is that we have unequal distribution of the terminal space. That's a problem given that we've got airlines that are growing in the market, and there have been huge dynamic changes as to how the airline business works post-9/11. Some of those airlines that have figured it out and are growing and want to make a commitment here don't have very much real estate. Other airlines that are taking a different strategy maybe have had more issues to deal with in trying to bring down their costs and have had to moderate what their growth pattern has been. Because they were here first, many of them have more real estate. That's a problem because it inhibits our growth, and it is one of the reasons that we haven't recovered from 9/11.

We've got to figure that out, and that is also dependent on the airline relationship, because it's not a happy circumstance. All of you who run corporations and private businesses, I'm sure, would not want to go to the powers that be and say, "I'm voluntarily giving up one of my greatest assets, which is my real estate on LAX. And yet, for LAX and for the growth of the economic base here, it may be really necessary." That's one of the unhappy things that you guys who rub shoulders with the airlines every day might encourage them about, number one, and be empathetic and feel their pain, number two.

We've sent a billion dollars off the airport to mitigate the impact of the airport. That is not necessarily a bad thing, because, as I mentioned before, we do have a lot of impact on the community that is very close to the airport. It is right and fair that we mitigate for those impacts. We have to be very careful in how we move forward that that is what we are doing. We are absolutely targeting and focusing on the impacts that we are creating, and then mitigating those impacts.

Let's say we leap over the issues of how we're going to fund it, we've got the airlines all in line; they are pushing us...We still have, then, the difficult task of actually figuring out how to deliver this program in the middle of an operating airport. I would venture to say that we have never done this before. Our organization has never done this before. There was a big building program in 1984, getting ready for the Olympics; the airport did a part of that work, and the airlines did a great deal of that work. We're going to have to figure out how, in an already over-capacity, functioning operation, we shut down part of that operation and carry through with a systematic and methodical construction program.

We're going to have to bring in experienced expertise to figure out how to be very smart about the city system in which we work to try to make this happen, because there are long lead times and everybody's got to get their fingerprints on things. So that is not something I want to leap over and leave you with the idea that, once we get the money fixed and we get the airlines on our side and the community on our side, we've got smooth sailing. We don't have smooth sailing; we have a lot of very sophisticated, complicated stuff to figure out about how we deliver this. It's like remodeling your kitchen in the middle of Thanksgiving dinner. It can be done, it's been done before, and we will do it, but it's a lot to figure out.

I want to simply thank you for your support thus far, and beg your indulgence and your energy for the future, because we are going to need it. This is going to be a long haul. We're not going to fix this tomorrow. One of the things, frankly, that I worry about, is that we are so far behind the power curve, and everyone is so anxious to get this fixed so quickly, that I'm not even sure we can move fast enough. We are going to try. I will hope that you keep encouraging us and encouraging all the folks that are going to have to be behind us in making the supportive decisions to enable this to happen, and I thank you very much.