L.A., Ontario still far apart on airport sale

ontarioairport.jpgLet's see, the city of Los Angeles, which would love to unload the little-used Ontario facility, figures it's worth $243 million to $605 million. The City of Ontario, which would love to take it off L.A.'s hands, figures the place has a negative market value, but would be willing to pay $50 million and assume $70 million in debt. I'd say those are two quite different views of reality ($100 million, plus debt, sounds like a good deal to me). In case you haven't been following, Ontario has become an airline wasteland - and where there are no flights, there are no revenues. It's hard to see why Ontario city officials would be interested in taking over a facility that has lost so much traffic - airport success really comes down to whether the carriers believe there's a market opportunity, and in this case a decision has been made to double down on LAX. How that changes with a simple transfer of ownership is beyond many of the experts who follow this stuff. Still, Ontario is pushing hard in its ongoing negotiations with L.A. officials. By the way, any proceeds from the sale must go to Los Angeles World Airports, the city's airport authority, and not the deficit-ridden general fund. From the LAT:

Inland Empire officials believe the airport can be a much more vibrant economic driver for Riverside and San Bernardino counties. They contend that Los Angeles officials -- who also manage Los Angeles International Airport and one of the nation's busiest general aviation centers in Van Nuys -- have not done enough to halt Ontario's severe decline. Passenger volumes have plummeted from 7.2 million in 2007 to 4.2 million last year. The latest projections indicate that the passenger level could fall below 4 million in 2013. Los Angeles officials assert that the worst recession since World War II has prompted carriers to reduce service and relocate flights to well-established markets at larger hubs, such as LAX. Efforts to cut costs and lure airlines back to Ontario, they say, have not worked.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
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