Airports Economic Impact
A major international airport is a tremendous “economic engine” for its region and country. According to the Airports Council International (ACI), in 2011 more than 5 billion passengers flew somewhere in the world, aircraft moved more than 94 million metric tons of cargo worldwide and more than 77 million flights conducted all this activity.
In 2007 the Los Angeles Economic Development Corporation estimated that each international flight arriving at Los Angeles International Airport (LAX) is worth as much as $623 million in economic activity, including the employment, commercial and operational activities associated with the flight, its passengers and its cargo. Based on that calculation, with more than 88,000 such flights arriving or departing at LAX in 2012, the annual impact on the local economy of international arrivals alone at LAX exceeded $27 billion.
On a national scale, ACI also reported that in 2010, between the airport operators, airlines, concessionaires and others, airports directly employed 1.3 million people. More broadly, airports supported 10.5 million jobs in the United States (1.4 million in California alone), amounting to approximately 7% of all U.S. jobs. In 2010 U.S. airports produced an annual output of $1.2 trillion and were responsible for about 8% of the gross domestic product.
How Airports Operate
Los Angeles World Airports (LAWA), is a proprietary department of the City of Los Angeles and owns and operates three airports, Los Angeles International Airport (LAX), Ontario International Airport (ONT) and Van Nuys general aviation airport (VNY). LAWA also owns acreage in Palmdale where a small regional airport (PMD) once operated.
An airport operates much like a small city. The airport is responsible for providing services to a variety of users including: passengers, airlines, air freight carriers and private pilots who all use the airport differently. LAX is ranked as the 3rd busiest airport in both the world and the U.S., handling, according to FAA and LAWA data, more than 605,480 flights in 2012 (an average of 1,659 flights per day), carrying an annual total of approximately 63.68 million passengers and 1.866 million tons of air cargo.
A busy airport such as LAX must meet the needs of airport users in order to remain competitive and to do that it must provide:
- Gates/Passenger Boarding Bridges
- Runways and taxiways
- Aircraft fueling systems
- Airline, air freight and passenger facilities
- Ground transportation access
- Safe operating conditions
LAX is a publically-owned commercial airport which operates on revenues generated at the airport. Municipal airport bonds are also sold to generate funding for airport capital improvement projects. Typically airports own all of their facilities and generate revenue by leasing those facilities to airlines, concessionaires and other tenants. Airports also generate revenue by charging aircraft landing fees, concession fees, and parking fees and through certain passenger facility fees (PFC) collected on airline tickets. Revenues are used to fund the airport’s operating expenses and to pay off bond debt. Major capital construction and maintenance projects may also be funded by Federal Aviation Administration (FAA) Airport Improvement Program (AIP) grants which do not require repayment. Funding and management of airports are regulated by the FAA.
Revenue generated by an airport is regulated by federal law and overseen by the FAA. Funds can only be used for operations and development of an airport and are constrained for use on airport-owned property for airport-related uses. Strict sanctions are imposed on the airport if the funds are not used in accordance with federal law (a concept known as revenue diversion).
The evolution of LAX
LAX was established in 1928 as Mines Field and went through five modernization efforts to become the LAX of today. Now, LAX is comprised of over 2,950 acres of active airport and 700 acres of additional airport-owned land including the El Segundo Dunes and the LAX Northside Area.
The runways at LAX were built to embrace the jet age of the 1960s. Since then, aircraft have grown much larger in size and weight. Therefore, to remain competitive, LAWA developed the LAX Master Plan in 2004 to plan the modernization of the airport to accommodate the largest planes flying today and address such key issues as ground access, passenger convenience and operational safety and security. The LAX Master Plan is a blueprint for future airport development intended to meet a forecasted passenger demand into the next decade. It was originally approved in 2004 and revised and updated in 2013.
Gates/Passenger Boarding Bridges
Gates are where airplanes park adjacent to passenger terminals for the purposes of enplaning or deplaning passengers via passenger boarding bridges. The airport typically leases gates for either exclusive use or joint-use to the airlines and in some cases certain airlines lease an entire terminal containing multiple gates. Maintenance and operation of the gates includes maintenance of the passenger waiting areas, washing, cleaning, stocking and refueling of planes, loading and unloading of baggage and other necessary tasks.
Runways and taxiways
Runways and taxiways are the paved pathways aircraft use to take off and land, as well as to move/taxi around the airport to deliver passengers to terminal gates or access aircraft maintenance facilities.
Runways normally are built to line up with the airport’s prevailing wind pattern. LAX has four runways, two on the north and two on the south. Air traffic controllers collaborate with pilots to determine how flights use the runways. LAX operates on an FAA waiver requiring additional management of airfield operations to ensure safety at all times whenever New Large Aircraft (NLA) such as the Group 6 Airbus A380 or Boeing 747-800 land or take off at LAX because the current runway configuration does not comply with modern FAA spacing standards prescribed for these aircraft.
Airports generate income by charging fees to fuel companies who want to deliver fuel to aircraft, this process is typically accomplished through the use of fuel delivery trucks or underground fuel delivery systems. At LAX an underground fuel delivery system delivers fuel from the “LAX Fuel Farm” to each of the terminals where fuel is pumped into the aircraft via a fuel hydrant system.
Airline, air freight and passenger facilities
A commercial airport such as LAX is a complex collaboration between airport management and the airlines and others who conduct or oversee aviation operations at the facility/airport. They collaborate to design, finance, build, operate and maintain passenger terminals, air freight facilities and aircraft maintenance areas, while commercial terminal concessions and other services for air travelers are largely operated by LAWA. The federal government provides air traffic control, security, safety and customs services.
In addition to the aforementioned gates, passenger terminals include ticketing areas, baggage handling and claim facilities, security and customs screening systems, passenger waiting areas and lounges, retail, food and beverage services and other necessary passenger conveniences.
Air freight is an important component of commercial aviation activity and LAX includes equipment and facilities to process millions of tons of it every year (1.96 million tons in 2012). It arrives and departs in dedicated air freighters as well as increasingly in the cargo bays of commercial airliners. Commercial truckers provide the links between points of origin and destination and the airport for air cargo. Federal inspectors regularly spot check the cargo to ensure compliance with applicable laws.
All of the commercial and private aircraft that use LAX must be properly maintained to operate safely. Airlines and other operators lease property and hangars from the airport to provide this crucial maintenance service. Federal officials periodically inspect aircraft to insure that proper maintenance is being provided.
Ground access is the means by which passengers, employees and visitors gain access to the airport passenger terminals and include multiple modes of transportation such as private automobiles, taxis, buses, shared ride vans, train, or bicycles. For these modes to get into LAX’s central terminal airport, LAWA provides the following:
- Roadways - LAX is served by the Interstate 105 and 405 highways that move regional traffic to and from the vicinity of the airport. City built and maintained surface streets bring traffic to the central terminal area and LAWA constantly strives to keep traffic flowing smoothly into and out of the airport.
- Parking Areas – Thousands of on and off airport parking spaces for passengers and their visitors are provided by LAWA and private entities.
- Drop-off and Pick-up - Curbside passenger drop-off and pick-up areas are provided in front of each terminal making it easier for passengers to get to and from their flights.
- Rental Car Companies – Private rental car companies provide shuttle service to their off-site facilities to efficiently and conveniently serve their airport customers.
- Shuttle Services – LAX implemented a consolidated hotel shuttle program which offers a reduced airport access fee to hotels using a consolidated shuttle service with three or more hotels rather than operating their own dedicated shuttle services . The program reduces emissions and congestion in the central terminal area. Using low emission Compressed Natural Gas-fueled buses, LAWA provides courtesy shuttle service to and from its off-site parking lots as well as a nearby light rail station.
- Public and Private Transportation – Limousines, shuttle vans, taxis, public transit buses and the LAWA-operated FlyAway bus system provide air travelers with multiple modes of airport access. In the future, the regional light rail system serving an airport-adjacent station will provide improved and more convenient access to LAX from downtown Los Angeles, Mid-City Los Angeles, South Los Angeles, Southeast Los Angeles County and the South Bay .
Safe operating conditions
Airports may manage their own police, fire and emergency medical services. At LAX, Los Angeles Airport Police, Los Angeles Police Department (LAPD) and the Los Angeles Fire Department (LAFD) are the first responders to any emergency. These City employees are stationed at the airport. As a major international airport with 63 million passengers annually, LAX maintains a highly secure facility. There are over 1,100 sworn and civilian Airport Police personnel in addition to the Transportation Security Administration, Federal Bureau of Investigation, Drug Enforcement Administration, US Customs, and Border Control agents monitoring the premises twenty-four hours a day.
Maintenance is a major consideration for the safe and efficient operation of an airport. At LAX, the Maintenance Services Division and Facilities Management Divisions are responsible for daily physical inspections of the runways and taxiways and immediately resolving any issues identified from trash removal to replacing pavement markings twenty-four hours a day. Airport staff also provides ongoing maintenance and custodial service in the passenger terminals, restrooms and public areas and ensures that all areas of the airport are maintained properly to maximize attractiveness and operational safety.