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LAX facing head wind in international travel

Unlike other big city airports in the nation, L.A. International hasn't seen foreign flights surpass pre-recession numbers. Among factors cited are the economy, changing travel patterns and the Japanese quake.

February 05, 2012|By Dan Weikel, Los Angeles Times
  • Contruction continues on the expansion of the Tom Bradley International Terminal at LAX. The refurbished terminal will feature a new shuttle system to transport foreign travelers to connecting domestic flights.
Contruction continues on the expansion of the Tom Bradley International… (Wally Skalij, Los Angeles…)

Los Angeles International Airport is lagging well behind other big-city U.S. airports in the contest to attract highly prized foreign travelers at the levels seen before the global recession caused a steep dip in international trips.

Large airports in California and most other regions of the country have surpassed their pre-slump foreign traffic numbers from 2005, sometimes dramatically so, according to passenger data examined by The Times.

But LAX, which is spending billions to regain its footing as the premier international gateway on the West Coast, still has 4% fewer international arrival and departures compared with its peak of nearly 17.5 million six years ago.

Overall, LAX, the nation's third busiest airport, has the second-lowest recovery rate among the 10 U.S. airports that handle the most international passengers. Only Chicago's O'Hare ranked lower. In first place was Hartsfield-Jackson Atlanta, where the foreign travel volume soared 46%. LAX still ranks third in the number of international passengers served.

A number of factors have stalled a resurgence in foreign travel at LAX, airport officials and airline industry analysts say. Among them are the prolonged effects of the worst economic downturn since World War II, changing travel patterns and natural disasters overseas, most notably Japan's devastating earthquake.

A particular drag on Los Angeles' performance was the 2010 bankruptcy of Mexicana Airlines, LAX's largest international carrier. Experts also note that the terminal complex lacks a convenient transit system and that international passengers often encounter a tedious and time-consuming arrival process — creating incentives for some travelers to use other gateways, such as San Francisco.

LAX officials acknowledge that they face significant challenges. But they point to two straight years of 5% annual increases in foreign travel — a trend they believe will continue as marketing efforts proceed and new international facilities are completed by 2013.

"I'm not that concerned about the figures. But I say that with reservations," said Gina Marie Lindsey, executive director of Los Angeles World Airports, which operates LAX. "We should not become complacent. It's very competitive out there. Everyone is scrambling for the international passenger."

The reasons are simple math. A single international flight traveling round-trip daily for a year from LAX generates $623 million in business activity and supports 3,120 jobs in the region, according to a 2006 study by the Los Angeles County Economic Development Corp.

Boosting foreign travel at LAX — and the accompanying airline and passenger fees — is also a critical part of the financing plan for the $1.5-billion renovation and expansion now underway at the Tom Bradley International Terminal.

The overhaul will eliminate remote gates where international passengers must exit planes on the tarmac and board buses to reach the customs and immigration station.

The refurbished terminal, which is part of a $4.1-billion package of airport improvements, will feature upscale restaurants and retail stores. A new shuttle system also is planned to transport foreign travelers to connecting domestic flights.

"All the right things are being done," said William C. Allen, president and chief executive of the Los Angeles County Economic Development Corp. "We will see more improvement in 2012 and 2013 as the economy gets better and the new Bradley terminal is opened. The trends are in our favor."

With unemployment rates of 11.7% and about 13%, respectively, in Los Angeles County and the Inland Empire, Allen said the recession hit this region harder than other parts of the country served by major international airports. Joblessness in those areas now ranges from a low of 6.7% in Maryland to a high of 9.9% in Florida.

John Smith, owner of American Travel Bureau, a large agency based in Palmdale that arranges trips to more than 80 countries, said his business "really dropped off in the recession." He says he sees some signs of hope, however. "International travel is starting to pick up again. The dollar is stronger than it was, which we are grateful for."

Another particular problem for Los Angeles, industry analysts say, was the March 2011 earthquake that devastated northern Japan and brought air travel to and from that nation to a standstill.

"My business went to zero," said Kiyoshi Tan, the branch manager at All Japan Tours, a travel agency in Ontario in the Inland Empire. He estimates that his business has recovered about 50%, but remains slow because of the disaster and a strong yen, which has increased the cost for Americans to visit Japan.

Last year, LAX got some help in foreign travel from flights added by Turkish Airlines, Iberia Airlines, Delta Air Lines and All Nippon Airways, as well as a surge in discounted flights from China. Singapore Airlines and Korean Air also introduced Airbus A380 service at the airport. The aircraft is the largest passenger plane in the world.

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