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Fuel Prices May Stop LAX Upgrades From Taking Off

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Jul 7, 2008 10:38 am US/Pacific

Fuel Prices May Stop LAX Upgrades From Taking Off

LOS ANGELES (CBS) ―

Click to enlarge 1 of 1: Planned airline service cuts may force LAX to scale back on improvements worth hundreds of millions of dollars. (File)
CBS

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Some long-term improvement projects planned at LAX may be pushed back because of planned airline service cuts, the director of the agency that runs the facility said in remarks reported today.

Thanks to higher oil prices, fares are rising, airlines are cutting flights, older gas-guzzling planes are being mothballed and passenger fees are being added. Now improvements worth hundreds of millions of dollars at aging passenger terminals and other airport facilities are in jeopardy, the Los Angeles Times reported.

These projects are financed with fees paid by airlines. But airline industry officials have begun warning airport operators that major service cuts are on the way and they need to consider the consequences of a prolonged economic downturn before proceeding with expensive capital improvements, according to The Times.

Depending on what happens later this year and beyond, airport operators say plans for LAX and facilities in San Bernardino, Long Beach and San Jose could see revisions, according to the newspaper.

Citing robust foreign travel, LAX officials say they will proceed with a multibillion-dollar plan to improve Tom Bradley International Terminal, The Times reported.

LAX is preparing to sell almost $1 billion worth of bonds to investors this month to help finance the first round of improvements.

But Gina Marie Lindsey, director of Los Angeles World Airports, the city agency that runs LAX, cautioned that "if airline growth continues to moderate, we might have to push back some of our long-term projects," The Times reported.

Those include a consolidated rental car facility, a mid-field concourse and reconstruction of the two runways on the north side of the airport, according to the newspaper.