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Would LA/Ontario International Airport sale improve air freight results?

, , , , | January 23, 2015 | By

When it comes to an airport that should be a major air freight hub few are better positioned than LA/Ontario International Airport (ONT) located in Ontario, California. While ONT currently ranks 15th nationally for air freight tonnage the total could be better and has been in the past. Situated 42 miles east of downtown Los Angeles the airport serves the Inland Empire, huge amounts of manufacturing businesses and more than 4 million people live within a short distance of the airport. Considering that it sits on I-10 and in close proximity to I-15 it would be hard to strategically better position an airport for air cargo operations.

With all of that said the future of the airport looks like it will be heading to court in an ownership battle between the cities of Los Angeles and Ontario, this in the wake of the airport significantly under-performing in recent years in both passenger traffic and air freight volume which could and should be the foundation for the airport's operations.

Los Angeles/Los Angeles World Airports (LAWA) has owned and operated ONT airport since 1967 along with LAX and Van Nuys and have overseen passenger volumes falling by 40% over the last seven years against a backdrop of increased passenger totals system-wide. Air Cargo numbers meanwhile have also been essentially flat after a major decline between 2004-2010. Considering the location of ONT and the market it serves both sets of numbers are extremely concerning especially as simultaneously LAX is witnessing increases year over year.

Those facts have led Ontario along with other Inland Empire cities and businesses to push Los Angeles to sell the airport to Ontario to improve operations as soon as possible citing an ongoing case of neglect, mismanagement and poor investment strategies by LAWA over the years. Collectively those campaigning for the sale say that missed potential at ONT has cost the local economy billions of dollars. What is clear is that for a region as large and populated as metropolitan Los Angeles the growing over reliance on LAX demonstrates some inefficiency and lack of balance. Just compare this situation with the more balanced multiple passenger and cargo operations in cities such as New York or Chicago.

At this stage the parties in question over the potential sale are heading for a showdown over the valuation of the airport which looks like it may be a long and protracted affair. According to the Los Angeles Times:

"Los Angeles airport officials have insisted for several years that LA/Ontario is worth hundreds of millions of dollars. In 2013, the consulting firm LeighFisher said the fair market value of LA/Ontario was between $243 million and $605 million. Ontario, in turn, hired the Oliver Wyman consulting firm, which countered that the airport was worth a negative $78 million to $104 million due to its severe passenger decline in recent years and forecasts for a slow recovery."

The future of the airport should still be a bright one and could hinge on the outcome of this matter, but for the sake of the air freight industry I hope that a decision that benefits the overall operations and helps see ONT reach full potential is arrived at soon. What do you think the outcome of the situation should be?

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