Airport Backers Hopeful $4.6 Million in Incentives Has Drawn Serious Bids From Delta, United
By JIM SKEEN\ Staff Writer
PALMDALE — With two proposals from airlines on the table and a $4.6 million incentive package ready for use, supporters of the Palmdale airport hope the stars are finally aligning for regular air service to take root in the Antelope Valley.
After years of heartbreak, supporters of the airport say they have good reason to be optimistic they can attract — and retain — an airline. A big reason for the optimism is a $4.6 million incentive package that includes a $900,000 federal grant to offset losses incurred by an airline.
“The grant makes this effort different from anything in the past,” Palmdale Mayor Jim Ledford said. “To underwrite a loss is a businessman’s dream. I think that it turned a few heads.”
The incentive package was put on the table at the same time Los Angeles World Airports solicited proposals for starting up operations at Palmdale, drawing in submittals by Delta and United airlines. The goal is to get an airline that will offer flights by 50- to 90-passenger jets to other western cities, such as Phoenix, San Francisco and Dallas-Forth Worth.
Details of the proposals are being kept confidential while LAWA negotiates with the airlines. The next step is a recommendation in early February to its commission on a possible revenue guarantee agreement with one of the carriers.
The possibility that the incentive could be used for both airlines hasn’t been ruled out, but given the amount of available funding, it is likely that it would go only to one airline, said LAWA spokesman Paul Haney.
“We fully expect to stay on schedule and open the airport this year with an airline going to a major hub in the western United States,” Haney said. “Getting two proposals means there is recognition that there is a market in Palmdale that they can develop.”
The incentives being offered were packaged by a coalition called Wheels Up Palmdale, that includes the cities of Palmdale and Los Angeles, Los Angeles County, the Antelope Valley Board of Trade, the Greater Antelope Valley Economic Alliance, the Los Angeles Economic Development Corp. and the Air Force.
In addition to the money to underwrite losses, the incentives include such items as terminal rental waivers and marketing efforts.
In a marketing move, LAWA has changed the name of the airport to L.A./Palmdale Regional Airport. LAWA officials said it would make the airport more marketable to inbound business and leisure travelers as a destination in the greater Los Angeles area.
The city of Los Angeles first started looking more than 40 years ago at establishing an airport in Palmdale. At one point, the city wanted to establish an international airport and set about acquiring 17,000 acres of farmland and desert east of Air Force Plant 42.
The use of those 17,000 acres is years, probably decades, away. For now, L.A./Palmdale Regional Airport is composed of a terminal building and land leased at Air Force Plant 42.
Under an agreement with the Air Force, Plant 42 can be used by civilian airliners for as many as 50 flights a day, and there are provisions to expand to 400 flights a day.
Larry Chimbole, a former Palmdale mayor who has worked on trying to attract airline service to the community for more than 40 years, said he is very optimistic about the latest efforts.
“I think the time is about right,” Chimbole said. “We needed the population growth (to support an airline) and now we have the population to support it.”
Chimbole applauded the use of incentives and marketing campaigns to help sell the airport.
“Palmdale is a foreign area to people from Los Angeles,” Chimbole said. “You have to get the people used to the idea of coming here.”
Bad timing and tragedy have plagued efforts to establish airline service. In the early 1990s, the Persian Gulf War sent fuel costs soaring, hurting fledgling operations at Palmdale; in 1991, 12 passengers and crew members were killed when a Palmdale-bound aircraft was hit on an LAX runway by a Boeing 737; and the recession of the mid-1990s and defense cuts also cut into passenger loads.
A major marketing campaign to attract airlines was derailed just days before its launch by the Sept. 11, 2001, terrorist attacks.
The most recent airline to operate out of Palmdale, Nevada-based Scenic, pulled out after just a year of operations, citing low passenger loads and operating losses. Scenic, although in the sightseeing flight business for decades, had little experience operating passenger service. While its service to the North Las Vegas Airport was fine for those staying in Las Vegas, it was a problem for passengers who wanted to travel on to other destinations.
A January 2003 report by the Government Accountability Office highlighted some of the challenges a community like the Antelope Valley faces in establishing airline service. Communities located near larger airports may face reduced demand because passengers opt for the airport with lower fares or more choices, the report said. Although not mentioned specifically by the report, that finding can easily apply to Palmdale, which is is within a couple of hours’ drive of airports in Los Angeles, Burbank, Ontario and Long Beach.
The GAO report noted that financial incentives have proven successful in attracting new service, but often that service ceases when the funding runs out.
“Longer-term sustainability may rest on a community’s commitment to making air service a priority,” the GAO report said.
Palmdale Mayor Ledford said the trend of airlines leaving once incentives dry up is a worry for the short-term efforts of establishing airline service. Whether this latest effort will be a success remains to be seen, Ledford said, but the long-term outlook is bright.
“We’re a growing market and the continuing gridlock in the Los Angeles Basin is only going to get worse, not better,” Ledford said. “Those things spell a good future for us.”
james.skeen@dailynews
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