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LAX's drop in passenger and cargo traffic has a ripple effect

Businesses including restaurants and shuttle and freight services suffer as the airport sees a major slowdown resulting from the recession and increased competition.

April 15, 2009|David Pierson >>>

Tamero said he had no choice; his cargo volume was down by half. The father of five said the financial strain forced him to sell his home in Rancho Palos Verdes. The family moved to another house in Lennox.

"I woke up one morning in shock," Tamero said. "I went from Palos Verdes to Lennox. It's tough."

Today's declining air traffic at LAX complicates the latest multibillion-dollar plan to upgrade Tom Bradley International Terminal by 2013.

A consortium of international airlines recently expressed concern that the renovation would result in higher landing fees and terminal rents. Airport workers could also face furloughs to offset the city's budget deficit.

It is against this backdrop that businesses around LAX try to move forward.

But it's been tough going for the likes of airline caterers who have seen their industry shrink 40% since 2000, said Roxanne Conrad, a spokeswoman for LSG Sky Chefs, which has a kitchen adjacent to the airport.

The recession only heightens their struggles as more cash-strapped airlines eliminate meal services. In the last six years, Sky Chefs has had its orders at LAX slashed nearly in half. It has adapted by consolidating three kitchens into one, Conrad said.

With fewer travelers, transportation services to the airport have also suffered.

SuperShuttle International, with its familiar blue vans, has watched ridership drop 8% from February 2008. Company executives said the numbers could be worse had they not been able to steal away customers from more-expensive car services.

One of those companies is Airport Valet of California Inc. Manager Sean Shilleh said many of his clients were employees at Bear, Stearns & Co. and Merrill Lynch & Co.

For $23.95 a day, customers drop off their cars at Shilleh's storefront on Sepulveda Boulevard and are ferried to their terminal. When they return to LAX, Shilleh sends a driver to pick them up and return them to their cars.

During better times, the service was a common perk for executives and celebrities. But business has declined 20% from a year ago.

"Customers have to pay out of pocket now because employers are paying less for these services," said Shilleh, who has reduced hours for his workers. "We're trying to ride it out until the economy turns around. But you can tell everyone is hurting around here. Nobody's traveling."


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