JMBM Development Rights: Gina Marie Lindsey, Executive Director of Los Angeles World Airports Speaks at JMBM Business Issues Forum

Gina Marie Lindsey began by saying she intended to focus her comments primarily on LAX. When she became executive director in early 2007, LAX had 61 million passengers flowing through its facilities; that’s down 7 million from the high point of 68 million in 2000. LAX has also seen a 7% reduction in air traffic since the first quarter of 2007. While most major U.S. airports have recovered their passenger counts, LAX never recovered from the shock of 9/11. While there’s continuing discussion about the need for increasing regionalization of its air traffic, much has been achieved. In fact, LAX has gone from handling 80% of all the air traffic in Southern California to just 57% today.

Given the current economic environment, the challenges facing LAX are magnified. When Ms. Lindsey arrived, the airport was in litigation with its air carriers over the issues of cost of operations and the need for them to support its capital program. Since there was no defined capital program at the time, it was imperative for LAX to conduct a needs assessment and define and prioritize the projects it needed to implement. Ms. Lindsey and her team have been successful in negotiating a standstill with the air carriers on litigation, while the two parties negotiate a trip settlement agreement. They have also been able to get the carriers to buy into the needs assessment they’ve developed for the capital improvements at LAX. Phase one will include the one million square foot expansion and renovation of the Bradley International Terminal and badly needed infrastructure repairs. LAX has at least 150 critical repairs and replacements needed, including retrofitting the central plant and basic mechanical systems, such as elevators. The upgrade of several terminals is badly needed, but will have to wait until capital is available. However, some of the infrastructure work LAX is contemplating will allow the airport to introduce a new concessions program in these terminals.

Another major issue requiring immediate focus is the need for LAX to reconfigure its facilities to handle the new generation of jumbo jets. Every airport authority in the U.S. understands that international flights produce major revenues, so competition is fierce to provide the facilities to attract these carriers. If LAX wants to compete, it needs to provide the type of landing and ground support facilities that will accommodate this new generation of aircraft. Ms. Lindsey concluded her remarks by emphasizing that LAX has many positives working for it. It’s in an excellent cash position, the air carriers have become partners rather than adversaries and relations with the community contiguous to the airport have improved significantly. She believes airports like LAX should be run as a business, and that’s her goal as executive director. Ms. Lindsey then fielded several questions from the attendees. These included a question about which agency handles security at LAX. She indicated that security costs $110 million each year and there are 200-300 Los Angeles Police Department and 1,000 airport police on duty. The subject of extending the light rail line into the airport was raised. Ms. Lindsey said she believes there is money available through the recent passage of Measure R. However, there are several technical issues to be resolved before the line can be extended. The question of naming rights was raised. Ms. Lindsey related that any and all ideas, including naming rights at the airport which would generate revenue, are under consideration. The final question dealt with the current status of the North runway expansion. Ms. Lindsey explained that the proposal was undergoing a new Environmental Impact Report (EIR) and independent safety study. She expects to have recommendations from the safety study in six months and the EIR completed by the fall of 2009.