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"It was a splendid population - for all the slow, sleepy, sluggish-brained sloths stayed at home - you never find that sort of people among pioneers - you cannot build pioneers out of that sort of material. It was that population that gave to California a name for getting up astounding enterprises and rushing them through with a magnificent dash and daring and a recklessness of cost or consequences, which she bears unto this day - and when she projects a new surprise the grave world smiles as usual and says, "Well, that is California all over."

- - - - Mark Twain (Roughing It)

Tuesday, September 3, 2013

California Economy - Ontartio airport down 40% in traffic

Ontario International Airport, about 39 miles east of Los Angeles, has experienced
a 40 percent drop in passenger traffic since its 2007 peak of 6.9 million.

Under and unemployment a drag on the economy
Obamacare capping workers at 29 hours a week only adds to the pain.

New York Times - Rolling into Ontario International Airport is a traveler’s delight.

The parking lots, across from either terminal, are mostly vacant. The spacious, tidy terminals are filled with natural light and few lines at the ticket counters. Jostling around the baggage carousel there is plenty of elbow room for everyone.
The greatest inconvenience awaits those who head to the taxi stand: sometimes there are no cabs. One has to be called.
“Truthfully, I love this,” Annette Long said as she prepared to check her bags for a recent flight, thrilled to be missing the freeway traffic and crowds she encounters flying out of Los Angeles International Airport. “It’s so easy.”
But what makes traveling so pleasant for passengers like Long also underscores the problem facing this regional airport, which, like the Inland Empire region that it serves, is still reeling from the devastating impact of the recession reports the New York Times.
As airports show slow but steady signs of recovery, with passenger traffic nearing pre-recession levels nationally, the passenger traffic at Ontario has plummeted 40 percent since its 2007 peak of 6.9 million, according to Federal Aviation Administration figures. The decline, fed by a confluence of economic misfortune, a change in airline business practices and local political turf wars, is projected to continue through the end of the year.

Room to Roam at the Ontario Airport
The liar politicians tell us the economy is better.  But if you are jobless or underemployed the last thing you do is buy airplane tickets, and passenger traffic at Ontario has plummeted 40 percent since its 2007 peak.
It has left Ontario with traffic levels around four million, about what they were in the mid-1980s, a decade before construction of two modern terminals that were supposed to make this airport a linchpin of the region’s economic growth.
But like the housing booms and busts that have driven the economic prospects of the area over the last 25 years, the airport’s plight has left some to wonder if such ideas were too speculative.
The Inland Empire, which includes San Bernardino and Riverside Counties, continues to be one of the fastest-growing regions in California, with more than four million residents, but the lure is affordable housing, not high-paying jobs. The region is projected to have a double-digit unemployment rate through 2015. And last week, a judge cleared the way for the city of San Bernardino to declare bankruptcy.
“With the benefit of hindsight, it might have been overreaching when they expanded,” said Sampath Rajagopala, a professor of data sciences and operations at the University of Southern California’s business school. “Airlines can never operate at a profit if they rely on consumer business. They need business passengers. Yes, there are a lot of people living there, but they are a lot more price-sensitive.”
It is not just the economy that has crippled the Ontario airport. There has been a change in how airlines operate, analysts say, prizing profitability now more than market share, which has driven airlines away from smaller airports to larger ones nearby.
Southwest Airlines, the main tenant at Ontario, began there in 1985 with five daily flights to Phoenix. It once flew 64 flights a day from Ontario in the late ’90s, but is now down to 35 flights a day. An additional reduction of 12 percent has been announced for January. At the same time, it has expanded service at Los Angeles International.
This has left Ontario with a conundrum: declining flights mean that airports must charge airlines higher fees per passenger to recoup expenses, and Ontario’s fee of $11.12 per passenger was close to the $12.18 that Los Angeles International charged in the 2012-13 fiscal year, according to airport officials who set the fees.

And with high fees, airlines are more likely to move flights elsewhere to lower those costs.
The belief that a return of local control will ultimately lead to the boom in economic development around the airport is embraced in the area. But a few voices warn that it would not be a panacea.
“Local control isn’t a magic wand,” said Janice Rutherford, the chairwoman of the San Bernardino County Board of Supervisors.
This spiral is not unlike what many in the Inland Empire know about the housing market, how one foreclosure can unleash a chain of events that soon leaves an entire neighborhood half-vacant.
“I can’t think of another situation like it,” said Jan Brueckner, an economics professor at the University of California, Irvine’s Institute of Transportation Studies. “It’s a great airport with good facilities that’s underutilized in the middle of millions of people. It’s the strangest thing.”


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