Tuesday, March 31, 2009

The economics of Ontario International Airport

Via podcast, I heard about a Riverside Press-Enterprise article that shared a troubling truth about Ontario International Airport - it's expensive.

A few snippets from Kimberly Pierceall's article:

Airlines land where there's demand, and there had been swelling populations in Riverside and San Bernardino counties wanting flights nearby.

But the region's housing-focused economy has been hit hard, and passenger airlines are cutting back. A larger percentage of seats were cut back at Ontario Airport last year than any other Southern California airport....

What the airport doesn't earn from concessions, parking permits, ATM transactions, rental car fees, advertising and luggage carts, it gets from its airlines. In its last fiscal year that ended in June 2008, the airport earned $72 million in revenue. Of that, $52 million came from airlines....

In March, the airport raised the annual rate it charges airlines for terminal space from $131.36 to $190.23 per square foot until June 30, more than other Southern California airports. It is an effort to overcome a potential $4 million shortfall in annual revenue. The airport may also raise parking rates.

San Diego Airport charges $73.35 per square foot and John Wayne charges $74.29 per square foot. Long Beach Airport and Palm Springs International charge $37.44 and $20.63 respectively.

Read the rest here.

In addition to declining passenger traffic, Ontario International Airport was hit by a case of bad timing and bad luck. Long a small airport, Ontario launched upon an ambitious expansion plan, building two new terminals in 1998 and planning for a third. Then September 11 hit.

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