Don't be fooled by the crowds this summer at LAX: Troubles loom large after Labor Day for the nation's airlines, passengers and airports.
Thanks to higher oil prices, fares are rising, airlines are cutting flights, older gas-guzzling planes are being mothballed and passenger fees are being added almost weekly. Now improvements worth hundreds of millions of dollars at aging passenger terminals and other airport facilities are in jeopardy.
These projects are financed with fees paid by airlines that use the airport. But airline industry officials have begun warning airport operators that major service cuts are on the way and they need to consider the consequences of a prolonged economic downturn before proceeding with expensive capital improvements.
"Our message to the world at large -- the federal government, the states and airports -- is that the industry is in a severe economic crisis. We need to urge them to take that into account when making decisions," said John M. Meenan, executive vice president of the Air Transport Assn.
Some major expansion and renovation projects are getting a second look. Oakland International Airport has shelved plans for a $500-million terminal after it lost three airlines, with two more to be lost in September. Passenger traffic is expected to fall more than 23%.
Depending on what happens later this year and beyond, airport operators say plans for LAX and facilities in San Bernardino, Long Beach and San Jose could also see revisions.
Citing robust foreign travel, LAX officials say they will proceed with a multibillion-dollar plan to improve Tom Bradley International Terminal, including installing new gates on the west side that can accommodate the next generation of large aircraft, such as the Airbus A380.
LAX is preparing to sell almost $1 billion worth of bonds to investors this month to help finance the first round of improvements.
But Gina Marie Lindsey, director of LAX operator Los Angeles World Airports, cautioned that "if airline growth continues to moderate, we might have to push back some of our long-term projects."
Those projects include a consolidated rental car facility, a mid-field concourse and reconstruction of the two runways on the north side of the airport.
The fallout is expected to be particularly acute for smaller airports in Southern California and may damp hopes to spread domestic air travel from LAX to nearby regional airports such as Ontario and Orange County's John Wayne. Airlines typically stick with their major hubs when cutting back service.
