Tuesday, July 7, 2009

Super shuffle at Ontario International Airport

Ontario International Airport has revenue problems, and they're choosing some interesting ways to fix them. As I've previously discussed, the airport has raised the fees that it charges to airlines. As a result, airlines are reluctant to use the airport at all.

Now, in another cost-saving move, it's trying to save costs that it has to spend on shuttle coordinators - people that help get passengers to a shuttle service. So here's what the airport did:

Starting [July 1], the airport will require shuttle companies to have at least 15 shuttles in their fleet, pay the airport $50,000 up front and pay for their own shuttle coordinator to arrange for curbside pickups and shuttles in the holding lots....

Before [July 1], the airport had spent $600,000 annually to pay for shuttle coordinators stationed at terminal curbs and in a holding lot. Now the airport won't pay anything to coordinate the shuttles, and it will add at least $50,000 per shuttle company to the airport's revenue. Once a shuttle company makes 10,000 trips, they'll need to pay a $5 fee per pickup.

You know, this sounds like a wonderful way for the airport to pick up revenue. What could go wrong?

Well, what if only one shuttle service qualified?

So far Super Shuttle is the only company to qualify, leaving four others who have operated at the airport for several years to either combine forces or look elsewhere for shuttle work....

George Abugattas said he started Apollo Shuttle eight years ago in the Inland region after driving for Super Shuttle for 12 years. About 70 percent of his business is from Ontario Airport travelers. The rest is spent picking up or dropping off passengers to John Wayne Airport or LAX. He said he's preferred Ontario because there were only six companies vying for business. Now, he says, he's not sure what he'll do.

"I don't know how long I'm going to be in business," he said.

Abugattas uses 10 vans at Ontario airport, employing about 25 drivers. Discount Shuttles has five vans, New Express Transportation has three and Go Fly Shuttle has two.

So what do the new regulations mean economically?

Before, it cost each company about $3,000 per van in fees paid to the airport for pickups. Adding the $50,000 up front fee, plus the estimated cost to hire a coordinator for about $250,000 (Super Shuttle has said they would pay half if that happened), Abugattas said he and other owners would face costs of $14,000 per van.

In that case, "we go out of business within a week or so," he said.

So, let's see...fewer airlines are flying into the airport, fewer shuttles are going to the airport...what's next? I predict that an increase in parking fees is on its way.

Oh, and for the record, when I recently flew to Atlantic City, I went via LAX. There were no flights from Ontario to Atlantic City. And how did I get to LAX? Super Shuttle.

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