The Battle of Ontario: How to Mismanage a Small but Really Expensive Airport

The fight for who will ultimately control Ontario Airport in California continues, and it's starting to get good. Today, LA World Airports (LAWA) runs the place, but the City of Ontario says LAWA doesn't run it well and it wants it back. Now the city has put out a document explaining just how poorly it's being run. Let me just say, it ain't pretty.

Ontario has laid out a fairly convincing explanation on why the city should take control back from LAWA. You can read the entire 25-page report here (pdf).

As I've previously discussed, Ontario is an expensive airport. Considering that it's a small airport outside of the main traveling population catchment in Southern California, that's a huge problem. But the costs aren't high for the reasons that I had originally assumed. I had thought that the overbuilt new terminal was weighing down the airport, but that's not the case. There is little debt left on that project.

Instead, it's just a ton of bloat that Ontario has suffered under the hands of LAWA that has jacked up its costs. This increase in costs has had huge consequences. Service has eroded greatly. True, not all of that is cost-related. The airport hit its peak when it brought ExpressJet in to do branded flying. That failed, and not because of Ontario. But there's no doubt in my mind that high costs have handcuffed the airport.

JetBlue went into Ontario expecting to grow, but its cost structure pushed the airline to look elsewhere. JetBlue now has its biggest Southern California focus city in Long Beach as well as operations in Burbank and at LAX -- but not Ontario. And Southwest continues to cut back capacity in Ontario. The airline used to run over 50 flights a day. It will be down toward 35 by the end of this year, and it's the only low-fare airline left at the airport.

This isn't some podunk airport. Ontario is not the closest airport to many of the money centers in LA, but it's a good alternative for many of them. It's 35 miles from old money Pasadena (LAX is 30 miles). It's 40 miles from Newport Beach and other Orange County suburbs. It's also an hour train ride from downtown LA, but it fails to have a connector for that last mile from the station to the terminal.

Is it going to be the first choice airport for any of these people? Nope. But if there is good, low cost service in Ontario, then it's certainly not out of the range of where people will drive.

But to get good, low cost service, you have to have good, low costs. Burbank charges an absurdly low average of just over $2 per enplaned passenger. Long Beach sits near $5. LAX is around $11. And Ontario? It's likely to be in the $15 to $16 range this year. You aren't going to see low-cost carriers at your airport when you have higher costs than the primary airport in your region.

Part of this will be resolved by the state of other airports in the region. Burbank and Long Beach may be cheap, but they don't have room to grow. Neither does John Wayne down in Orange County. LAX, on the other hand, has plenty of room to grow, but it faces another problem. LAX has a few massive construction projects underway that will provide little benefit to most airlines yet will probably double or even triple costs over the next few years.

So that will help Ontario, but it's not enough. When you're still operating at double the national average cost per enplanement, airlines will find better places to put their airplanes. So the key is figuring out how to bring down those costs. Tomorrow, I'll talk about how Ontario proposes to do just that.

Related:

• Ontario Airport's High Costs Showcase Missed Opportunity
• Ontario's Air Traffic Glut Draws Anger Toward LA
• Ontario's Spiral of Doom Results in Less Traffic and Higher Fees