Recession Reverses California Airport’s Growth

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 Ms. 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.

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. 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.

Ontario’s experience mirrors that of other smaller airports in large markets — like Islip and Newburgh in New York — which expanded to handle added traffic only to see airlines pull back. 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 the way 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.

Brad Hawkins, a Southwest spokesman, said that cost “is by far the most important determinant in how we operate.” The company’s service to Ontario, he said, “is where it should be.”

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.