Although the airline industry remains in a deep slump, airport commissioners on Monday approved $1.13 billion in construction contracts to revitalize the primary entry and departure point for overseas travelers at Los Angeles International Airport.
In one of the most visible signs that the modernization of LAX is underway, the Los Angeles Board of Airport Commissioners awarded two contracts to the Walsh Austin Joint Venture, which will handle the reconfiguration of the Tom Bradley International Terminal.
By early next year, travelers can expect to see construction on two new concourses and gates to accommodate the next generation of large commercial airliners.
The board also set aside almost $140 million in contingency funds for the project and approved the sale of more than $1.6 billion in revenue bonds to pay for construction and to refinance existing debt.
"This action is a tremendous step forward," said Commissioner Walt Zifkin. "Nothing has really happened since 1984. Hopefully, it won't take this long to do the next modernization project."
Airport officials plan to add 1 million square feet to the Bradley terminal to make room for ticket counters, security checkpoints and passenger lounges as well as expanded customs and immigration facilities. Restaurants and retail stores will occupy a grand central hall.
The so-called Bradley West project also calls for nine new gates that will handle the latest in large commercial airliners, such the Boeing 787 Dreamliner and the giant Airbus A380, which can be configured to carry more than 800 passengers.
Two of the gates are scheduled to open in early 2012. The overall project is expected to be completed by mid-2013. Airport officials estimate that the project will employ about 4,000 construction workers.
Except for the current remodeling of the Bradley interior, the terminals have not had any major improvements since the 1984 Summer Olympics. Over the years, the aging airport has often received poor to average marks by passengers and airlines.
"The Bradley is the centerpiece of the current modernization program," said Gina Marie Lindsey, executive director of Los Angeles World Airports, the operator of LAX. "The project will change how the airport looks to passengers and how international passengers arrive and depart. We are completely redoing the front door."
The City Council, which has consistently supported the airport revitalization plan, must approve the Bradley West project before construction can proceed. A vote will be scheduled in coming weeks.
"I have been pushing for the modernization in a way that will enhance the experience for passengers and the airlines," said Councilwoman Janice Hahn, who has insisted on additional gates at Bradley. "This plan does that. This will make LAX the world-class airport we've wanted."
Airport officials are proceeding with the Bradley West project despite a severe national recession and the worst economic downturn in the history of the airline industry. As a result, major airports around the United States have been delaying expensive improvement projects, and airlines have been canceling and postponing orders for wide-body aircraft.
The latest forecasts by the Boyd Group, an aviation research and consulting firm in Colorado, show that the number of passengers at LAX will decline from about 59 million in 2008 to about 55 million by the end of this year.
The volume is expected to dip to 51 million in 2011 and recover somewhat by 2014. The passenger volume at LAX peaked at about 68 million in 2000.
According to the Airports Council International, LAX has dropped from the sixth-busiest airport in the world in 2008 to the eighth-busiest for the first seven months of this year.
But airport officials say they are planning for the long term and remain optimistic that the project can be financed with revenue bonds.
LAX traditionally has had a good credit rating and a lower amount of debt compared with other major U.S. airports.
To cover the debt payments, Lindsey said, the airport must carefully manage its operations to save money, increase revenue from concessions and parking, push Congress to increase the $4.50 passenger facilities charge and gradually raise fees and rents for the airlines.
On average, the airlines now pay more than $11 in fees and rent for each passenger who boards a plane at LAX.
Lindsey said that cost could reach almost $20 by 2016 to help pay for the project.