There is a misconception that LA/Ontario International Airport’s costs are significantly more than all other airports in the region, says the general manager of the medium-hub facility.
Jess Romo, general manager of the airport, said he also wants to make it clear that the agency that runs ONT is not manipulating costs specifically to benefit Los Angeles International Airport.
Ontario officials, which have been fighting to regain control of the airport, have claimed Los Angeles World Airports has ignored ONT at the benefit of LAX, one of the busiest airports in the nation.
Inland officials also say the airport is too expensive for airlines to do business and has not appropriately been marketed the facility in recent years.
Romo, who has been the general manager at ONT since 2006, explained how the costs and fees assessed to the airlines is based on several circumstances, and not a decision set by the agency.
“What an airport charges an airline to operate at a facility represents 5 percent or 15 percent of their total operating expenses,” Romo said.
Most costs will come from fuel, labor and equipment, Romo adds that airlines does prefer that an airport agency keep its costs in line since it is something that can be controlled.
“That is not a major driver for an airline to have service at an airport or not,” Romo told the Riverside City Council on Aug. 27.
Romo gave a candid overview of what he said is going on at the airport and its struggles. The longtime Claremont resident even admitted he prefers to fly out of ONT unless LAX is his only option.
But traffic figures at ONT for July indicate the airport has seen a 12.2 percent decline in travelers go in and out of the airport compared to the same month last year. Overall, the airport has seen an 8.6 decline in passenger activity in the first seven months of the year compared with the same period in 2012.
The airport manager said he is working on setting up meetings with airlines to discuss the possibility of new service and to emphasize the convenience and affordability of Ontario.
Romo recently traveled to Southwest’s headquarters in Dallas, Texas – along with a delegation from Riverside – to discuss air service at ONT.
Airlines, Romo says, are operating differently than when the recession hit, controlling the inventory and the seats in the market.
“I actually got bumped out of a flight about a month ago going to Dallas for the Southwest meeting,” he said.
Southwest, the largest carrier at ONT, has cut capacity from 60 flights a day to about 30 flights a day since the recession. There are some days when service peaks to 35 flights a day, Romo said.
The meeting was an opportunity to meet with the airline’s management and those involved in future planning of seats in the market.
Cindy Roth, CEO of the Riverside Chamber of Commerce was joined by Tom Freeman, as well as Debbie Guthrie, director of the Riverside Convention and Visitors Bureau.
Despite the fact that the chamber still favors local control, Roth said she thought it was important that some action be taken in the interim.
“When you are talking about executive from Dallas, you have to remember they are looking at documents and demographics, sometimes they only look at a certain radius. We wanted to make sure they understood, in our county, the various different population demographics,” she said.
Once the Riverside delegation began talking to the executive management at Southwest, they quickly realized the low-cost carrier was making business decisions based on information and reports from 2010, Roth said.
Roth said they have since sent over city manger reports detailing all the improvements made in Riverside since then as well as updated economic data.
“We have now started to build that relationship,” Roth said. “We would like to meet with the other carriers. Our goal is that economic driver for the region, that is important for us and a top issue for residents and businesses.”
Guthrie said the meeting was an opportunity for Riverside officials to spread news about the changes going on.
“They don’t see the personal side of this community. It gave us an opportunity to emphasize the importance of Ontario airport as our local airport to attract regional activity,” she said.
As for Romo, it solidified the carrier’s commitment to ONT.
“Ontario is very important to Southwest. It is a very important piece to their network system, they’ve been in Ontario for many years and they are committed to a having successful operation,” Romo said.
Airlines are looking at two major factors when deciding on adding or eliminating service at an airport. The first, how many passengers in the airport’s catchment area have an annual household income of $75,000 and how many are bringing in an average of $150,000. The first figure translates to the possible leisure traveler the carrier can attract. Between Riverside and San Bernardino counties there are 1.1 million households that meet that threshold.
When looking at the $150,000 household income, which is what airlines typically considers their business travelers, there are 250,000 household that meet that qualification in that demographics, Romo said.
Orange County households were also included in Romo’s report, but the general manager noted that ONT has to compete for the traveler, especially in the northern end of Orange County, with John Wayne Airport.
Riverside City Councilman Mike Gardner pointed out to Romo that his data failed to include the eastern portion of Los Angeles County, such as West Covina or San Dimas, where residents would rather use ONT than have to drive to LAX.
Gardner suggested including those cities would drive the average revenue closer to what the airlines want for new service.
“This is a bit skewed from what the reality of the catchment of Ontario really is, by drawing the line where they are drawn,” he said.
Romo said there comes a point when the eastern portion of LA County also chooses to fly out of Burbank Airport. In fact, all the airports in the southern California region all lose traffic to LAX because of the schedule of flights, price and availability of the seats, he said.
“That’s because LAX is the 800 pound gorilla in this region. It is the airport,” Romo said.
When the airline industry began changing in 2007, almost every decision they made was to improve their revenue, Romo said.
At that time airlines were dealing with the high fuel costs and less people traveling. There was a shift, airlines began filling the capacity and reducing the frequency of flights.
Comparing the average costs of the 14 nonstop destinations offered at ONT to the other regional airports, Romo says it is “a pretty competitive airport relativity to the fares it’s charging.”
There are airlines at LAX today that are fighting for market share. At some point one carrier will get priced out of the LAX market and will not be able to compete, he said.