Ontario Airport Gains Its Independence, But Now It Has to Find a Way to Increase Traffic

ONT - Ontario

I’ve covered the ongoing saga of Ontario Airport here in Southern California for years, and now it looks like we finally have a resolution. The new Ontario International Airport Authority (OIAA) will be taking over management of the airport from LAWA, the Los Angeles authority that also runs LAX. The people in Ontario like to villify LAWA as the destroyer of everything, and now they’ll have their chance to prove that to be true. Oh, just one problem. It’s not entirely true.

This is going to be tough, but I know what I’d do if I had the chance to run Ontario. As I mentioned on AirTalk last week, the singular goal should be to get airline costs as low as possible. That means cutting airport costs and finding alternative revenue sources, like this one….

Bass Pro Shops Ontario Airport

For those who aren’t familiar with the area, the LA/Ontario International Airport lies about 45 miles (or 4 hours at around 5pm) by car east of downtown Los Angeles in what is known as the Inland Empire. This area is a sprawling mix of suburbs and industry. While the IE has a lot of people living there, the people aren’t as affluent and likely to travel as in other parts of Southern California. In addition, Ontario is hardly a destination other than it being a gateway to Palm Springs (which has its own airport anyway). It does have decent proximity to some places. Orange County isn’t all that far to the south, and there is a Metrolink rail that takes people to downtown LA. The train stops short of the airport, but it’s close.

Decades ago, LA World Airports took control of Ontario Airport and put it into its “regionalization” strategy. This was supposed to see LAX growth tempered by shifting shorter-haul flying to regional airports like Ontario and the formerly LAWA-run Palmdale. In the late 1990s, LAWA built two brand new terminals (that make the airport seem far bigger than it is since they’re named Terminal 2 and Terminal 4) and passenger traffic grew. Ontario hit a high in 2005 with just over 7.2 million passengers served. That held for a couple years and then the wheels fell off the place.

In 2008, the airline industry was in a rough spot as oil prices shot through the roof, but Ontario remained relatively unscathed. Its traffic numbers were elevated by the ill-fated ExpressJet effort to fly point-to-point service between secondary airports. But other airlines began to cut to account for a world with higher oil prices. That year, Ontario served 6.2 million passengers. By 2009, ExpressJet was gone and Ontario saw traffic plummet to 4.8 million passengers. It hit a nadir of 3.97 million in 2013, a number which bounced up slightly to 4.13 million in 2014.

While traffic was falling, local residents were looking for a scapegoat. It couldn’t just be the combination of higher fares, higher oil prices, and consolidation that hurt Ontario, could it? It had to be LAWA’s fault. The reality is somewhere in between. The industry trends mean that Ontario was bound to have traffic loss, just like many other regional airports. But LAWA’s mismanagement of the facility, which has some of the highest costs around, undoubtedly made things worse.

So it was that Ontario and the surrounding communities wanted to take over management of the airport. This was a contentious battle that went back and forth for years. It ended up in a lawsuit which would have gone to trial in the next couple of weeks. But as often happens, as the trial date neared both sides decided an agreement was a better plan. To be fair, it wasn’t just timing. The previous mayor Antonio Villaraigosa had a hilariously wrong view of what the airport was worth. Back in 2012, Ontario offered to pay $250 million. The mayor wanted $474 million. When Villaraigosa left, the new mayor of Los Angeles Eric Garcetti didn’t consider this an important issue. He of course wanted to make sure that the deal wouldn’t hurt him politically but he was more than happy to just see this thing go away.

Now it’s basically a done deal though there have to be a variety of approvals and signatures. Ontario has formed the OIAA along with the county and it will run the airport going forward. In exchange, Los Angeles will get paid. Including the assumption of debt, LA will receive about $250 million. Yes, that’s the same amount Ontario offered way back in 2012. This whole drama could have been avoided if the previous administration in LA wasn’t so pig-headed.

It’s effectively a done deal, so now what? It’s easy to throw rocks from the other side of the fence, but now Ontario, or rather, the OIAA, has to actually make things happen. Nobody asked me, but without question the number one priority needs to be to get costs down. The cost per enplanement for Ontario in 2013 was a very high $12.73. Regional airports should not be anywhere near that range, mostly because CPE has a much greater impact on shorter flights.

If an airline pays $12.73 per person on a flight to China, that’s ok. But if it pays that on a flight to Oakland, then it’s not. In particular, think about where the growth is in the US. It’s coming from the ultra low cost carriers. Those guys are more cost-conscious than anyone. In fact, even though there are other airports in the LA area that might be more attractive, if the price is a right an ultra low cost carrier might take another look at Ontario.

I hope OIAA comes in and slashes costs as low as possible. The agreement with LA does have some job protections in there, but they appear to be temporary. That is a huge piece of the airport’s operating costs, of course. But it doesn’t have to be all about slashing costs. It can also be about finding ways to increase non-airline revenue so airlines can pay less. This airport needs some serious creativity to make it attractive to airlines, but it also has to work under the rules of the FAA.

I’d like to say I’m optimistic that they’ll assemble a team to really do something innovative. I’d like to say that, but it’s so rare to see it actually occur. Traffic won’t return overnight, but now nobody can blame LAWA. This airport will sink or swim on its own.

[Original image by Frederick Dennstedt (originally posted to Flickr as Ontario Airport) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons]

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42 comments on “Ontario Airport Gains Its Independence, But Now It Has to Find a Way to Increase Traffic

  1. A few questions.

    1. Why does LA have essentially four regional airports & one ginormous international gateway? In the NYC area, there are three primary airports & as many regionals I,e Stewart, Islip & Westchester County.

    2. Is it possible to turn Ontario into the second international gateway sort of like Newark? That is assuming they can get their costs under control.

    3. Curious – how do passenger counts & costs compare to BUR, LGB & SNA.

    1. A few thoughts:

      1. Because none of the other airports were suited for anything other than regional flying. Had El Toro become a civilian airport, perhaps it might have had a chance to serve as a big hub and earn some greater international traffic.

      Note that even in metro areas with multiple airports, one will dominate the international traffic. In the DC area, Dulles has something like 85% of the international traffic between it, DCA (preclearance only), and BWI. In New York, JFK dominates – EWR has a great deal of international traffic, too – but it’s still a great deal behind JFK.

      1. True, but Newark has gained numerous international carriers in recent years. Also, Contenental/ United have increased their own international coverage out of Newark. There are few global cities that have exclusive JFK flights today.

        1. True, but all three of the New York airports have a major strength. That’s just not structurally the case in the LA Basin.

          If SNA had room to grow and expand operations, it could easily serve that same role that EWR plays to JFK – but that’s not the case. This matters both for the physical capabilities of the airport but also the opportunity for that airport to connect to a bigger network.

    2. SEAN – I think NYC is a very different kind of beast. It is heavily constrained at its major airports, so there isn’t really an option for one mega airport to exist. There’s just not capacity for it. In LA, LAX has been able to handle the demand so far, though it’s getting closer to the arbitrary limit that was agreed upon with surrounding neighborhoods. That limit should go away and there will still be more room to grow. In other words, I think for the most part there are only multiple large intl airports in a city because of capacity constraints or regulatory reasons. Those don’t exist in LA.

  2. I recently flew BWI – PHX – ONT on SWA, My ultimate destination was Irvine, CA….right next to SNA. SWA also has that exact same flight path, in fact, I flew that one last summer. ONT was convenient, easy to navigate and the drive from ONT to Irvine did not feel long at all. The route terminating at ONT was much cheaper this summer. Along with driving costs down, ONT really needs to attract more LCCs. Now that they are free from the shackles of LAWA, perhaps they can lure Frontier, Allegiant or a lot more flights from SWA. Having said that, perhaps there is simply too many gates in the SoCal market that can’t be supported by demand. There is LAX, Long Beach, Burbank, ONT, SNA and even Santa Barbara. Some of these airports are left over from a different era in flying. Ever flown out of Burbank? It is like traveling back in time back to 1955, right down to having to walk out onto the tarmac. (There is a modernization program in the works, however). I wonder if consolidation may be in order, and if in some cases the real estate is worth more than the airport? I hope that the airports in the region survive – it is a unique situation and provides the flyer with multiple options. At this point, it looks like SNA is the best positioned (SWA has started flying internationally from the airport). It is the second busiest in the region and serves an affluent area with ample business travelers. It’s main drawback is that is severely space constrained and has some of the shortest runways in the nation. We are in an interesting time, and the price of oil surely will rise again at some point. Which SoCal airports will survive and thrive going forward?

    1. I for one would like walking on the ramp to get onto a plane as long as its somewhere where the weather is reasonable like the LA area. In Seattle I’ll keep my jet bridges thank you very much.

  3. ONT is an option I’ve tried to use when I have work in Anaheim (ditto that for Long Beach). The problem with these “regional” airports around LA is while they have good availability to places like PHX and SLC it isn’t so great for non-stop availability to places east of the rockies. My non-stop options into the area is LAX and LAX. 9x out of 10 it’s faster to go into LAX and drive.

    Compare that to other areas with multiple airports and I have a dearth of non-stop options. South Florida I can go into MIA, FLL or PBI. NYC I’ve got JFK and LGA and EWR…DCA and IAD and BWI – all available via non-stop flights. I know it’s not an apples to apples comparison on all these but given the population and business in the LA area one would think it would be more comparable to east coast centers that support multiple airports.

  4. Does anyone see a problem with the name of this airport? Clearly, people in SoCal do not, but for anyone else, including travel specialists, Ontario is well known as a Canadian province. To some extent, there is an identity problem.

    But Ontario is also much closer to Disneyland – so is there a marketing opportunity there? (No, I am not suggesting the obvious “Mickey Mouse Airport”, but it does have a certain panache!)

    I wish them every success!

      1. Grey Line runs Disneyland Resort Express buses to LAX and SNA; if the demand were there they could probably expand the service to ONT as well. Currently resort guests flying to ONT would have to use a shared-van service like SuperShuttle (which I had to do when I went to Disney World since the Disney buses only went to the Disney-operated resorts and not the on-site Dolphin operated by Starwood).

    1. ed.jacob – You’re right about the name. It doesn’t matter to locals, but for people who want to go to LA, they aren’t going to loo for Ontario as an option. LAWA did try to fix this by calling it LA/Ontario, but that didn’t really stick. I fear that they’ll get too proud about their local name and try to move further away from the LA name, but they shouldn’t.

      1. This is great point – a few weeks ago I literally had a higher-up question why we had a project going on in Canada – based on his quick glance at my travel approvals report, which included ONT.

        I love flying into SNA and ONT when I have business in the area – LAX is getting better, but I’ll take smaller/closer airports whenever available.

  5. For 3 years, I lived in Anaheim Hills & worked in Riverside so ONT was a very natural airport for me to use. There are a few things they can control which will help them grow, all of which center on Cranky’s main point of cost. If I can park my car for $8 a day instead of SNA’s $18 that adds up quickly on a week-long flight. What they don’t have control over unfortunately is traffic. There are just certain times of the day I know I can’t get from Orange County to ONT because the 91 would be a parking lot for 2-3 hours with rush hour traffic so I would fly out of SNA or LGB instead.

    Jet Blue has their LGB hub, & SWA has a large presence at SWA. If I was ONT, I would be hitting up all of the other LLCs to establish their home bases at ONT.

    1. Mike – Parking is actually an example of a cost I would increase if I were Ontario. The key is to get airline costs down so that they’ll be more willing to fly to the airport. If parking costs go up, that will help reduce the amount the airlines need to pay. Now if it’s really $8, I don’t know how much higher I’d go. But when I see airports offering free parking, I just don’t get it. People don’t really think about the cost of parking when they buy a ticket.

      1. I’d be curious to know if parking ever is profitable at an airport on a fully cost allocated basis. Surface spots are something like $10,000 to pave, and a parking garage is $25,000 to $35,000 a space.

        Sent from my computer that moonlights as a phone.

      2. > People don’t really think about the cost of parking when they buy a ticket.

        Brett,

        I agree with you on this when it comes to business travelers and those leisure-only travelers who either travel infrequently (1-2 trips per year) or who don’t have many other options. However, in areas with multiple viable airports (NYC is a great example, with JFK, EWR, LGA, and HPN all 1 hour or less from Westchester County, if one books a flight outside of rush hour, and to a lesser extent parts of the Midwest that have multiple small cities within 2 hours, e.g,, Cincinnati/Dayton/Louisville/Lexington/Columbus/Indianapolis), smart travelers paying their own way **do** consider the cost of parking and tolls.

        For example, I can pay $50 R/T in cab fare to HPN, or $15 a day parking at the rental car companies across the street from LGA, or roughly $15+ a day off-airport at JFK, or $6-9 a day at EWR. For a longer trip, that makes HPN more attractive even at higher fares, or (since JFK and EWR are equally as much of a pain in terms of traffic and tolls for me) it makes EWR more attractive than JFK. Somewhat of a limited case? Yes, but again, travelers who pay for their own trips and who face several viable options at the time of booking seek to balance convenience, schedule, and price. If any one airport is extremely out of whack on parking (e.g., HPN charges $30/day, such that the parking for a week’s trip to Florida can cost more than the flight), pax are left to either use off-airport services, get a ride (paid or from a friend), find an alternative, or suck it up and fork it over.

  6. If other airports of ONT’s size or smaller can make it, so can ONT. There’s always been talk of the high cost for carriers to use ONT, so that should be their first area to work on to get carriers to add service.

  7. @ed.jacob – Actually, LAWA did notice the name issue, and “rebranded” the airport “LA/Ontario”. No one outside LAWA seemed to ever use that name, though.

    I’m not sure it’s that big of a deal anyway, at least for domestic flights, as most Americans wouldn’t presume a Canadian airport would have the province’s name in the airport name instead – or in addition to – the city’s name. If anything, the name “LA/Ontario” comes across as a sort of “Frankfurt-Hahn” branding even though, depending on where you’re going in the Southland, Ontario may actually be more convenient than LAX or any of the other airports.

    Ontario’s size and ability to expand could eventually make it a viable international alternative, especially if Asia starts to get more charter services and LCCs in the trans-Pacific market. At the least, it could become what Sanford is to Orlando. But to get any sort of growth, they’ve got to get the enplanement cost down.

    1. Keep in mind that in Burbank, the complete airport name is Burbank Glendale Passadina. So to keep it simple, People just call it Burbank.

      In NYC, no one calls Newark “Newark Liberty International.”

      1. SEAN – They actually ditched the Burbank/Glendale/Pasadena (and sometimes Hollywood) name. It’s now just Burbank Bob Hope Airport, which is incredibly stupid.

        1. I don’t think the Bob Hope name is stupid. I kinda like it, especially since LA is the entertainment mecca. People here in Sacramento call it Bob Hope and John Wayne for SNA. They also say Burbank and Orange County. But I think Burbank got some panache with adding ol Ski Nose’s name.

  8. Have family in the area and visits every few years usually have me look at flights to ONT (which, from SFO, were rather expensive in recent years).

    When flying back home at Sunday, we were always surprised how much of a ghost town the airport was at 7pm. Most of the restaurants/stores were closed at 7pm.

    So Cranky, any creative ideas?

    1. Oliver – I’m sure there’s a lot that can be done. First, look at cutting operating costs, but that’s relatively easy. The creativity would come in by increasing non-airline revenues. The airport has a lot of land. Maybe there’s a way to develop some of that differently. Get costs down and then you’ll have a shot with the big ULCCs.

  9. It will be interesting to see how things ‘play out’ at Ontario Airport.

    I love BUR airport, just traveled from BUR to DEN on WN a week ago.

    Some links with more information, even the airport itself calls it ‘Burbank Bob Hope Airport’. Idea: drop the Bob Hope reference.

    http://www.burbankairport.com/

    March 2015 article from the LA Times about a proposed new terminal at BUR.

    http://www.latimes.com/local/california/la-me-snapshot-burbank-airport-20150303-story.html

    1. Our return trip from SoCal was BUR-DEN-BWI on WN. It was fun – my first time there. As mentioned, the issue with BUR, LGB and SNA is that they have no room for expansion. My guess is that they were built before sprawl really set in and are now completely surrounded by development. Does ONT have room to expand? I’d also love to see a chart that highlights at what percentage of capacity the airports in the region are operating at.

      1. davidp627 – Burbank has no real room for expansion from a terminal perspective. It also has very short runways so it is constrained. Orange County has that same runway problem, though it is mostly constrained by regulatory caps. It could handle more, but it won’t. Long Beach is the same. It could handle more traffic easily but it’s restricted. That’s not to say they’re all operating at max capacity. They’ve all seen drops from max passenger counts, so there is room to grow a bit. But they’ll never be huge.

        That leaves Ontario, and Ontario has plenty of room to grow if anyone were interested.

  10. Nonstop coast to coast is not needed at ONT. Nonstop to hubs is. DFW, ORD, DEN, MSP need to be served directly from ONT so that timely and convenient connections can be made.

  11. Does nobody find it insane that Ontario airport is located in California? It’s a long drive home for people booking flights “home” to Ontario Canada…

    1. I find this less likely that people flying to Portland Oregon instead of Portland, Maine. At least in this case it’s a city name versus a province name. Not city versus city.

      Sent from my computer that moonlights as a phone.

  12. In the last year I’ve become once/twice a month business traveler (mostly domestic and 1X per year Europe) and despite being based in Santa Barbara County, I look at all airports for convenience and price (I own the biz, so watching the bottom line is important). As much as I’ve been avoiding United, I actually found a good price and time for a flight to Newark from Santa Maria via SFO. That trip is around the corner.

    Ontario all year long has been the most expensive by $100 or more as a result of airport expenses. Burbank was OK earlier this year, but prices went up as Summer got closer. My parents live full time in Big Bear and I would love to spend some time visiting them, 1:15 drive down the hill to Ontario and catch a competitive flight to a big enough hub to get me around the country.

    Thank’s to Brett’s Bass Pro sign, I was thinking if the new airport authority could use some of it’s under utilized real estate for a shopping experience/showroom, etc.

  13. One final note. I once was part of a cruise package to Miami out of San Diego in January of 1990. Took a Delta 767 from San Diego with a quick stop in Ontario where air stairs were pulled up and we loaded up additional passengers and to continue on to Atlanta to meet up with Miami connection.

  14. I personally don’t think OIAA is going to be able to do much to attract more flights. Airlines like to be at the major airports where there are connection opportunities. Perhaps Spirit and Allegiant will start 2 or 3 flights from ONT to someplace, but that’s about it.

    People focus on the cost per enplanement as if it’s the deciding factor, but it really isn’t. Even if they cut it in half, $6 is a negligible portion of the average airline ticket cost these days. It’s not going to matter much.

  15. Family in Palm Springs area…..for many years flew Delta nonstop Atlanta to Ontario, good price around $350 round trip…sad to see Ontario airport not doing so well lately!

  16. Flying into PSP can be expensive and rental cars are pretty pricey there, too, so I’ve been using ONT for travels to Palm Springs. Cars at ONT are pretty reasonable but getting to the rental car facility can be a pain in the a** during peak travel times. The rental car buses, all too often, fill up at Terminal 2 so by the time they get to Terminal 4 there is no room so you have to wait. And wait. And wait. I want the new airport authority to have buses dedicated for Terminal 4. However, if the weather is pleasant the walk to the rental car facility from Terminal 4 can be nice. The airport itself is easy to navigate and the drive to PS is easy.

  17. For someone who flies 60,000 to 100,000 air miles a year and lives 10 miles from ONT, it is my first choice but per passenger fees have a huge impact on the fares carriers charge. I avoid LAX like the bubonic plague. If there is one airport across the country that I have zero love for, it is LAX. I will drive to SNA if the fares as compared to ONT have a big difference. LAX is ONLY used if I can get to my destination with a direct non-stop at a substantially lower fare. The fare difference must be huge and the time savings has to also be substantial. The time to get a shuttle to parking, the commute back to the Inland Empire, during anything but off hours, makes it a 3-4 hour trip. My time is a lot more valuable than that LAX hell.

  18. Like others have said, LA/Ontario Airport suffers from a name recognition problem. Now it is no longer part of LAWA ownership. The airport has the means to not just consider changing its name but also hire a new PR firm to renew its image to foreign airlines.

    The airport’s two runways are over 10,000 ft which is as long if not longer than the ones at LAX and are used to serve as an alternate for that airport. The international terminal only has 2 gates currently. The new airport authority has to decide whether it should invest into better facilities for international traffic (which is diminished somewhat by congestions at LAX). That could drive organic feeds.

  19. Finally !!!
    Now maybe some airlines like United and Delta will start to offer once again jet service from the Bay Area to Ontario. LAWA killed a super noes terminal and drove a lot of the legacy carriers away from Ontario. I know there a lot of people who prefer the ease of ONT over flying into/out of LAX. I remember pre 9/11 how many flights United had between ONT & SFO and ONT & SJC. We’re talking 737’s FULL 5-6 times a day. Then we got Ted – one flight in the early AM and one ln the evening. Now it’s United Express and the fares are astronomically high. Hopefully they will also attract some International carriers (ANA 787, Air Berlin, and some other European & Asian LCC’s ?) – one can only hope !

  20. Better late than never (I’ve been traveling)

    No one mentioned that UPS has their west coast hub at ONT. I’m sure there’s a big revenue stream from that operation.

    I used to live in Corona. Back in the day I could fly ONT-CVG non-stop. I loved the old terminals where DL had the only jetway. After the new terminals were built I could fly to SFO almost anytime of day. SEA was well served by Alaska too.

    I flew in a few years ago to ONT. The place was a mess. For a revamp they did in the 90’s, the place looked worn. A lot of the shops were permanently closed. Also the TSA checkpoint was at the top of the escalators and they had to limit how many people could enter by holding them up on the ground floor. I’m not sure that’s changed.

    I always liked ONT better than SNA due to the longer runways. After taking to a United pilot, she said the margin for error on approach and departure were pretty slim by modern standards. The only ding on ONT is it closes a lot when the Santa Ana winds are blowing. I had several white knuckle approaches there.

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