Los Angeles World Airports

In an anticipated, but no less surprising move, the City Council of the City of Los Angeles (“Los Angeles”) agreed to transfer Ontario International Airport (“ONT”), currently owned and operated by Los Angeles, to the Ontario International Airport Authority (“OIAA”) and its members which include the City of Ontario (“Ontario”).  The transfer occurs in settlement of a currently pending lawsuit in the Riverside County Superior Court in which Ontario, the OIAA, and other parties challenged the legal right of Los Angeles to ownership and operation of ONT.  

 
The major provisions of the Settlement Agreement include the following:
 


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In an unexpected turn of events, the Federal Aviation Administration (“FAA”) has denied an application by Los Angeles World Airports (“LAWA”), under 14 C.F.R. Part 161 (“Part 161”), for approval of the nighttime noise mitigation procedure that requires both arrivals and departures to the west and over the Pacific Ocean from 12:00 midnight to 6:00 a.m. (“Application”).  The FAA’s decision was unexpected because the procedure has been in effect on an informal basis for almost 15 years.  LAWA sought FAA approval, pursuant to the requirements of the Airport Noise and Capacity Act of 1990, as amended, 49 U.S.C. § 47521, et seq., (“ANCA”) which requires, among other things, that any restriction on noise or access be approved by FAA or, in the alternative, all the airlines operating at the airport.  In addition, the filing of the Application was required by LAWA’s 2006 settlement with surrounding communities Inglewood, Culver City, El Segundo and the environmental group Alliance for a Regional Solution to Airport Congestion.  

FAA’s denial was based on the Application’s purported noncompliance with three of the six conditions required by ANCA for approval of restrictions on Stage 3, “quieter” aircraft.  These include: (1) the restriction be reasonable, nonarbitrary, and nondiscriminatory; (2) the restriction not create an undue burden on interstate or foreign commerce; (3) the restriction not be inconsistent with maintaining the safe and efficient use of the navigable airspace; (4) the restriction not be in conflict with a law or regulation of the United States; (5) an adequate opportunity be provided for public comment on the restriction; and (6) the restriction not create an undue burden on the national aviation system.  49 U.S.C. § 47524.  
 
FAA’s decision comports with what appears to be its general policy of denying exemptions from ANCA’s stringent restrictions.  


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On July 27, 2012, Los Angeles World Airports (“LAWA”) released the “Specific Plan Amendment Study Draft Environmental Impact Report” (“DEIR”), involving, among other things: (1) a realignment and extension of runways to the east on the North Airfield Complex, including a separation of the two north runways to permit their unimpeded use by the largest operating aircraft, A-380s and 747-800s (“Category VI”); (2) expansion and renovation of the terminals; and (3) associated movement and potential undergrounding of surrounding thoroughfares including Lincoln Boulevard.  Sides are already forming over the proposed plan. 


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An interesting dichotomy was observable in recent news coverage of the utilization of the two major airports owned and operated by the City of Los Angeles. On the one hand, in a recent story, the Los Angeles Times reported that the City of Los Angeles’ Board of Airport Commissioners, the administrative agency charged with overseeing the operation of the City’s airports, is considering closing one of the two terminals at Ontario International Airport (located in the City of Ontario, but operated by Los Angeles World Airports (“LAWA”)). The stated reason was that Ontario has lost one-third of its peak 7.2 million passengers from 2007 to 2010, putting Ontario “on track to have as many passengers as it saw in 1987.” On the other hand, a story in the Los Angeles Business Journal touts passenger increases at LAX of between 3% and 10% over the period April through October, 2011. What the latter story does not do is venture an analysis of the potential causes of this enormous disparity.


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The Los Angeles Times reports that, while economic conditions are slowly improving throughout most of the nation, including most of California, California’s Inland Empire, comprised of Riverside and San Bernardino Counties is not so fortunate. The Times reports that the volume of home sales in San Bernardino County dropped 18.3% from last June, and in Riverside County 14.7%. Similarly, jobs fell throughout the Inland Empire in sectors such as leisure and hospitality (minus 3,200 jobs in June) and educational and health services (minus 1,300 positions in June). Finally, the region lost 3,900 construction jobs over the year, and more than 75,000 since the peak of construction in June, 2006.

As part of the solution to this ongoing problem, the City of Ontario and County of San Bernardino have joined together to negotiate a return of Ontario International Airport (“ONT”), operated by the City of Los Angeles through its Airport Department, L.A. World Airports (“LAWA”) since 1967, to local control. ONT has, consistent with the condition of the local economy, seen an approximate 30% decrease in operations since 2007.
 


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The City of Los Angeles (“Los Angeles”) went on record yet again, rebuffing a cooperative effort between the City of Ontario (“Ontario”) and County of San Bernardino (“San Bernardino”) to promote growth at Ontario International Airport (“ONT”). The Los Angeles City Council formally voted to oppose SB466, introduced earlier this year by Senator Bob Dutton, which would allow for structured negotiations regarding the transfer of ONT to a newly formed joint powers agency comprised of Ontario and San Bernardino. The rationale for the legislation is that ONT has proportionally suffered the worst loss of passengers and airline operations of any airport in the Southern California region, and that a shift to local control is needed to restart what had previously been considered the economic engine for the Inland Empire.


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