Ontario's Spiral of Doom Results in Less Traffic and Higher Fees

(MoneyWatch)  Ontario is just one of many airports that has entered what I like to call the spiral of doom. The airport has seen traffic drop by nearly a third and now it's raising costs to fly there. Seem crazy? Yeah, but sadly it's the state of affairs at many smaller airports today.

Ever since Ontario built its new terminal, it hasn't been a cheap airport. The costs tended to be higher than those at LAX and it was less desirable. The combination has led to many missed opportunities. JetBlue moved its major Southern California base to Long Beach after Ontario costs proved to simply be too high.

But now things are getting even worse. The end of ExpressJet's branded service and cutbacks by nearly everyone else have left the airport with about two thirds of the traffic it had last year. With fewer flights coming in, the airport has to charge more for each flight in order to pay off its operating costs which have a substantial fixed component. So fees go up, and guess what? Airlines cut back service even more.

It's an ugly place to be, and many other airports are facing the same issues. It shows once again why it's so important for an airport to be cost-conscious. You never know when spending programs may come back and really bite you.