May 4, 2004 - From the September, 2003 issue

Kelley Brown Offers An Airlines' Response To Mayor Hahn's Proposed LAX Master Plan

Mayor Hahn's proposed modernization of LAX is in the midst of its public comment period. With virtual unanimity, all parties involved recognize that doing nothing is not an option for Los Angeles or the region. Yet, unanimity hardly defines how the various stakeholders in the LAX plan would propose increasing safety and security at a more modern LAX. MIR is pleased to present this interview with Kelley Brown, Executive Director of the Los Angeles Airlines Airport Affairs Committee, in which he articulates the airlines' appraoch to the mayor's proposal.

Kelley, can you elaborate on the perspective you bring to consideration of the LAX master plan now being advanced by Mayor Hahn's office?

I'm executive director of the Los Angeles Airlines Airport Affairs Committee, which represents all of the airlines that serve LAX with respect to common issues among the airlines. Our concerns include lease issues, fee increases, as well as security operations issues that have arisen since 9-11, and of course the LAX master plan in which the airlines have a tremendous stake.

Metro Investment Report has published a number of interviews over the years concerning the proposed alternatives for redesigning and perhaps expanding LAX to better serve both the traveling public and cargo. What exactly would the airlines like to see happen at LAX to make the airport more functional and cost effective, as well as an engine for airline growth nationally and internationally?

The major issues for the airlines are actually covered in many of the key objectives that were outlined by Mayor Hahn-improve safety, security, and passenger convenience. Those projects would include such things as reconfiguring the south airfield, improving the security functions of the terminals to basically allow passengers and baggage to be processed more quickly to reduce the security threat, and improve customer service. These issues are particularly pressing in the international terminal, which we perceive as probably being the worst among the terminals in terms of passenger service. Also on a passenger convenience theme, improvements to the roadway system, such as a consolidated rental car facility, would eliminate a large number of busses and improve traffic flow on the central terminal roadways.

In a recent interview in the Metro Investment Report, Dan Garcia, the former Chair of the Airport Commission, asserted "the plan takes an existing great airport-it's convenient, it's compact, it functions in a relatively harmonious way-and destroys it." Taking into consideration the security upgrades necessary post 9/11 at the airport, what do you read as the objectives of the mayor's modernization plan and are they realizable as proposed?

The objectives of the mayor's plan are excellent. But, the airlines are concerned that this specific proposal, Alternative D, does not satisfy these objectives. In fact, our concern is that it may even degrade passenger service and make the airport less secure. The airlines would like to see a different set of improvements that would achieve the same objectives without the possible degradation of passenger service that you might see with Alternative D.

How involved have the airlines been in the planning for the modernization of LAX? Some critiques have asserted that the process has been less than transparent and quite insular. What's been the airline's experience?

The airlines have not been very heavily involved in the development of alternative D.

Some in the business community have noted, "What different does it make if the airlines have been left out of the planning process? The airlines are not really stakeholders in the development of L.A." What's your response to this assessment of your clients' relevance in this planning process?

The airlines certainly believe that they are important stakeholders. They're the ones who need to conduct business at LAX and they're the ones who pay the largest share of the cost of the airport. So I don't know, beyond that, what those critics might have in mind.

LAX is obviously a critical market, the second largest metropolitan area in the country. I think most, if not all, of the airlines will feel the need to serve that market regardless of which plan gets implemented. But, the concern is of implementing a plan that makes it more costly to operate at LAX and, at the same time, reduces the level of passenger service.

Has the industry publically shared its comments on the EIR yet and what are they?

We have not shared any comments on the EIR publicly, but I can say that our concerns will not be very different from what we've already discussed. The major concerns are that, conceptually, the airlines are fearful this plan may not work.

The approval process for any airport modernization project is cumbersome, lengthy and costly. Give our readers a sense of what the airline industry's approach with the LAX and Alternative D will be re the City Council, board of supervisors, congressional representatives and others? More specifically, from your experience around the country and in Los Angeles, how is this matter likely to unfold?


One thing that is different in the airlines' minds regarding LAX as opposed to the majority of airports around the country is that the airlines are usually included a little earlier in the process. If that had been the case here, we might have a plan that was more acceptable to the airlines at this stage of the game.

To answer the first part of your question, I don't know specifically what steps are going to be taken. I do know that the airlines are very interested in engaging the city in a discussion about the plan and hopefully coming up with a plan that's acceptable to both the city and the airlines, as well as any of the other stakeholders at the airport.

As we do this interview, in today's LA Times there is a story reporting that LAX would like to go forward with consulting contracts to start implementing the planning of Alternative D. Much of that funding goes towards the Manchester Square provision, which is more than half of the disclosed costs. Do you have any reactions to LAWA going forward on a fast track with the planning as announced?

Certainly, in a master plan process, at some point if you're going to proceed you need to get into that advanced planning stage. However, given that Alternative D is not necessarily going to be the final plan it would seem a little premature to go ahead at this point.

Kelley, let's close by addressing the national ramifications of putting passenger caps on markets as large as LA, and your thoughts on the changing economics of the industry and what it takes to offer the patrons of airlines the services they demand in a competitive way.

LAX is a strategic airport in the system for a number of airlines, so it's very visible and certainly could have an impact on how projects are approached around the system. From a national precedent-setting perspective, the concern about the proposed Alternative D is that if you implemented such a costly project that had an adverse impact on customer service and possibly made the airport less secure, that could translate into similar projects at other airports around the country.

There are some in the industry, however, who have argued that the changing nature of the cost structure of the airlines is being undercut by LAX's Alternative D-that the costs per passenger for this upgrade will ricochet through the cost structure of airlines like Southwest, and that it's a dangerous precedent. Is there merit to such concern?

The cost impact of implementing Alternative D could make LAX the most expensive airport in the system on a per unit or a per passenger basis, with costs upwards of $30 per passenger. For a low cost airline whose fares might be less than $100, that's obviously going to have a pretty big impact. Whether or not that causes airlines to reduce their service significantly or to leave the market is very hard to predict. But, there's certainly a risk there.

The security objective announced by the mayor's office is certainly worthy, but the solution, as you suggest, doesn't meet the objective. Is there any airport in the world that's approaching the problem the way LAX and the mayor have proposed?

I'm not aware of any. This approach is certainly untested, and may have too many unknowns, in terms of what the security requirements might be in the future, what the technology might look like in the future, etc. Rather than proceed on something with this drastic of a shift in the way security is approached and customers are processed, we might be better off to adapt security measures to the existing configuration and improve security at existing terminal structures.

I can't finish this interview without asking whether all the members to the organization which you speak for are speaking with one voice on LAX?

The short answer to that is no. This is a position that the organization has adopted and one airline, which is United, has asked that they be identified as not supporting the organization's position.


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