Will Master Plan Process Tame LAX’s Unconstrained Demand?

When we last interviewed you in the fall of 1994, you were completing selection of your Master Plan consulting team for what you believed would be a thirty month time frame for establishing the needs, parameters, and EIR for Los Angeles International Airport (LAX). Bring our readers up to date on where the LAX Master Plan process is. 

The Master Plan consultants have all been selected. We completed that process in May, and have brought some additional consultants on board since then. We have just recently completed Phase I of the Master Plan, and we are still on schedule. Thrity months was an optimistic time frame and we are trying to hold to that. However, when we deal with some of the options of the plan, the community gets more involved and this involvement takes time. We are, however, still trying to meet our original thirty month deadline.

The Master Plan has been broken into three phases, and your first phase was collecting data. What outcomes can you share with our readers from the first phase, and what remains to be done?

Phase I was basically data collection. We performed demand forecast, both in terms of passengers and cargo. We also performed significant analyses in the areas of environmental assessment, economic impacts, ground transportation and regional access, urban design and engineering infrastructure. We initiated a very pro-active and aggressive community outreach program. Phase II will take all of that data and allow us to develop physical concepts, which we will then review and present to the general public. In Phase Ill we will select the options and move through the EIR and EIS. 

We have completed Phase I and are starting Phase II which is concept development and planning evaluation. Phase I, which focused on passenger and cargo demand forecasts was somewhat overwhelming. 

The unconstrained demand in the year 2015, (in this context "unconstrained demand" means if we had all of the land and property, and there were no negative impacts, and all the demand that is out there could be accommodated) would be 98 million people who want to come to L.A. in 2015. This compares to 54 million today. The cargo forecast projects 4.75 million tons of cargo, versus our current 1.7 million tons. Yet, we are still the second or third busiest cargo airport in the world. That forecast of demand will drive our analysis into Phase II. 

Translate this demand you have discovered in Phase I into economic benefits for the city and the region. What does meeting this demand for passenger and cargo growth mean economically to the city and region? 

The economic benefits are huge. Currently, we are at $42 billion in economic activity. If we accommodate the 98 million passengers and 4.75 million tons of cargo, that figure would rise to $64 billion. Currently, we generate 390,000 jobs and that could increase to 800,000 jobs region-wide when you include direct demand, indirect demand, and induced demand. 

The dilemma that we have is expressing those numbers so that the community can understand them. What does $42 billion mean in jobs? It is inconceivable because you can't see all of those jobs in one place. The economic benefit is overwhelming in terms of opportunity. Our challenge is to take everyone's concept of what an airport should look like and fast forward everybody to 2015. Then, show everyone the economic benefits and how we plan to mitigate the negative impacts. The purpose is to get as many of the positive economic impacts that we possibly can, without disrupting people's lives. That is the real challenge. 

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When last we spoke, you had two vacant positions—Deputy Director of Business Development and Deputy Director of Surface Transportation. Have those positions been filled, and how will they impact the Master Plan process? 

Actually, the Master Plan process has been very helpful, particularly in the surface transportation area. A number of the lower-level positions are filled, although not the Deputy Director positions. We are going to begin recruiting in March for both of those jobs. 

Whenever an airport tries to expand there is often debate from the environmental community suggesting that the premise of starting with demand equations are less important than starting with what is a tolerable balancing act or demand versus congestion and environmental concerns. What is your response to the concern that maybe starting with the demand forecasts and building scenarios around demand is challengeable as a way of approaching this master plan process? 

Everything in today's world is challengeable. It seems logical to start with how many people and how many tons of cargo want to come to L.A. That tells you what marketplace exists. Just because we know that 98 million people want to come to L.A. doesn't mean that we can accommodate that demand. 

Dan Garcia is providing leadership on the Master Plan and has been since we started. When he was a commissioner at the Airport he undertook the responsibility of working with us to put together the consulting teams. Even when he went to the Community Redevelopment Agency, he remained dedicated. Now, as President he is really promoting this project. 

Dan, the Commissioners. and I have committed ourselves to a very positive approach to dealing with the Master Plan. Our interests are not how big we can make LAX, but more realistically, how big can LAX get to accommodate the demand, and at the same time ensure that we are militating the negative impacts, such as noise, air quality, and transportation circulation.

For each scenario, whether we start at 54 million and go to 65 million—whatever the configurations are that we propose—we will evaluate the negative impacts the scenario might create, as well as the positive impacts. In today's world, none of us are naive enough to think that we can pour a lot of cement and make a new airport. Our purpose here is to make sure that we try to balance the positive growth implications, from an economic standpoint, with the negative implications of traffic, noise, and other issues. 

We have hired environmental consultants, traffic and transportation consultants, and urban design consultants with an eye towards trying to balance these issues. Everyone in this community has been through these processes at one time or another. In an open way I want to encourage participation and challenges to our processes and scenarios. No matter where we start, we have gone into this recognizing that we want to go through the whole process without trying to hide anything. We want all facts on the table, and we want to talk about the problems as well as the benefits. And we want the community and elected officials to help us. 

FAA administrator David Inkan has admitted that airport capacity represents the single biggest constraint of US aviation systems. Rather than money, neighborhood and community opposition is the biggest constraint on expansion. Could you comment on that as it applies to your master planning process at LAX?

We recognize that the demand squares with Inkan’s concern over capacity, and we also recognize the community's concern about what happens when we double the size of LAX. We have already started a number of community meetings and again, we are not going to hide anything. We are considering some ideas that may never be accomplished given the negative impacts that they might bring about. 

We are generating a lot of ideas and engaging the community to achieve the balance of growth potential without creating a nightmare of traffic, noise, and air quality problems. 

It seems that the positive economic impact is area-wide, but the local area suffers with the negative impacts of that growth. How do you make this balancing act reach fruition through this political process?

It's true that most negative impacts affect those in the immediate area, but the most positive economic impacts are also in the immediate surrounding areas. In all of the demographic analysis that we have done, you can see that the closer you are to the airport, the more job creation occurs.

Also, the people who are associated with the airport live closer to it. There is no question that in Orange County or even San Diego County there are manufacturing plants or other businesses whose entire business may be dedicated to exporting through LAX. Although those who benefit the most from the job creation and other positive economic impacts are still in the immediate area. 

The noise issue, which is a huge problem for most people, will be dealt with in two ways. First, new technology—newer aircraft, called "stage three" aircraft—has really minimized noise contours. Under federal law, all craft are to be stage three by the year 2000, and our fleet is currently about 85% stage three. When our full fleet are stage three aircraft, the communities affected by noise will shrink tremendously.

Second, along with Councilwoman Galanter, we are working on a sound­proofing program for the surrounding communities. Our plan is to sound­proof the 8,000 homes around the airport lo reduce noise levels. If we change the direction of the runways, we will expand the noise insulation program to accommodate the new areas affected. With these two mitigation measures we will take care of the noise concern. 

Traffic and transportation are a bigger challenge. We are the biggest origin and destination airport in the country. We used to be about 80/20% and have developed to about the 65/35% level. This means that an increasing number of our passengers are connecting passengers, which translates into no increase in traffic problems in relation to the number of passengers that come through. We have a lot of people who just walk off of one airplane and onto another.

All of the projections that we have seen suggest that LAX will be a huge international connecting hub. We may be 50/50% split between origin/destination and connecting passengers in the year 2000. This will decrease the negative impacts associated with traffic. To deal with the non-connecting increase in passengers, we are looking to improve the Sepulveda Tunnel and Arbor Vitae, direct access via the 105, the Green Line or some other high speed rail to move people through the area. 

We are going to analyze these options and return with some recommendations. If we can't cure the problems, we are not going to be able to build—it's really that simple. That is why the consultants that we have hired are very seriously looking at the data and how to mitigate potential problems. Air quality is an ongoing problem and we are working with CalStart to increase the use of electric vehicles, clean-burning fuel, and one-line fueling stations. We are working hard to limit the pollutants that we can control. 

What are the potential options and directions that might be considered in Phase II? 

It is too early to speculate, and my speculation would cast a shadow on the public input process. But I can tell you generally that in Phase II we will take all of the data from Phase I and determine scenarios or options that will then be reviewed and presented to the general public. 

One of the issues of Phase II is how we accommodate all of this traffic. The biggest problem is the commuter aircraft. They are about ten percent of our traffic, but about thirty percent of our operations. We are looking at how and where we can accommodate them. It may mean the addition of a fifth or sixth runway—a fifth one for them and a sixth one for our other needs. We've also talked about the possibility of building on the water and down Century Blvd. 

Basically, we have looked to the north, south, east, and west for options. I emphasize 'only looking' because we have not studied those options in detail. We have options that go to all the way to Century Blvd. South is difficult because we can't tear down the 105 freeway. Your imagination can take you among all our options. 

It would be nice if we could maintain the current boundaries, but it just isn't possible with only 3,500 acres. That is why we are being so careful in terms of how we study it, because we generally know what people will react to. It would be a disservice to the city not to consider all of the options to accommodate the projected 98 million increase. 

Jack, you are also the airport manager for other airports under the L.A. Airport Authority. How do you respond to the notion tant some of this growth ought to be shifted to the other airports under the control of the Airport Authority, such as Ontario, Palmdale, etc.?

We are taking a regional view, and the growth will be spread out. We are looking at the impacts of increased traffic at Burbank and John Wayne, neither of which are under the Airport Authority. We have looked at the prospect of El Toro and will find out in March if El Toro has potential. The 98 million does anticipate, at least within the basin, that all of the traffic they can absorb will be accommodated. 

Burbank will be limited because they don't have a cap; John Wayne is already capped at 8.5 million passengers; and we feel that Ontario can easily grow to 12 to 15 million passengers. We have included all of that information in Phase I. 

In the demand forecasts, LAX will get a decreasing share of the increasing domestic traffic. You will see the other airports—John Wayne, Ontario, and Burbank—getting an increase in the domestic traffic. LAX currently owns about 67% of the domestic traffic, and 33% is international. In the year 2015 we will be about 50% domestic. 

There is no competition among Southern California Regional Airports—we all service a different niche. We will be the major international carrier and the others will increase their domestic traffic. I don’t believe there is going to be a problem, but the capacity issue is overwhelming. 

In October, the FAA budget established a 12% reduction in expenses. There has also been a cap on the airport improvement program. What is the estimated cost of this growth, and where will the money come from to build? 

I really don't know what the cost is going to be because that depends on how big LAX can become and how much change is going to occur. We are the highest-rated airport in the world from a financial standpoint. We have a double A rating, and no other airport is even rated. Our debt is only $365 million, so we have a lot of capacity from a bond standpoint. 

We stopped collecting PFC' s (Passenger Facility Charges) in January, because projects that have originally been anticipated are being undone by the Master Plan. It was smart for us not to create a People Mover when the Master Plan would probably move it someplace else. 

Our allocation under the federal AIP is only $11 to $15 million a year, so we do not have to depend on that as much as smaller airports do. Our PFC collection is about $60 million a year. At the time when we anticipate construction and development we will use the PFC's and bonds.