Ontario International Airport Deal Breaks From LA Control, Returns To City

(FOX 11 / CNS) A protracted battle over control of LA/Ontario International Airport neared an end Thursday with the announcement that Los Angeles will transfer ownership of the facility to Ontario.

RELATED: Money Woes Continue at Ontario Airport in the New Year

"I have supported the transfer of (the airport) to local control since my first day in office and I am thrilled that we can stop litigation and focus on a partnership that expands Southern California's commitment to superior air travel,'' Mayor Eric Garcetti said.

Ontario Mayor pro Tem Alan D. Wapner praised Garcetti "for his commitment to airport regionalization.''

"This action will help ensure that Southern California has the airport capacity to meet the long-term demand for air travel and restore the region's most important economic and jobs engine,'' and is a "major step forward in
regional cooperation,'' Wapner said.

The agreement will need approval from the Los Angeles Airport Commission, the Los Angeles and Ontario city councils, the Ontario International Airport Authority and the Federal Aviation Administration.

The terms of the agreement call for Ontario to pay Los Angeles about $150 million, and assume all of the airport's debts. Another $40 million in the airport's unrestricted cash accounts will be transferred to other Los Angeles World Airports accounts.

With about $60 million in debt factored in, the deal is worth about $250 million, according to Garcetti spokeswoman Connie Llanos.

The deal also requires Ontario to protect the jobs of the airport's existing employees.

Los Angeles City Councilman Mike Bonin, whose district includes Los Angeles International Airport, said the deal will give "passengers throughout the region better travel options, give the residents of Ontario a say over their own airport and ease the burden of traffic and congestion on the neighborhoods surrounding LAX.''

Rep. Norma J. Torres, whose 35th Congressional district includes the Ontario airport, earlier Thursday called the transfer agreement "long overdue.''

She added that "LAX and Ontario each play unique and important roles in our region's transportation infrastructure, and Thursday's announcement will ensure that each airport is better able to reach its full potential.''

Ontario allowed Los Angeles to operate the airport beginning in 1967 and transferred ownership in 1985 on condition that L.A. officials work to attract airlines to the facility.

Ontario filed a lawsuit in June 2013 after negotiations for an ownership transfer hit an impasse. One of the chief stumbling blocks was L.A.'s request for $475 million to relinquish the airfield.

According to Los Angeles World Airports, the city agency that manages LAX, Ontario Airport and general aviation airfields, nearly $500 million has been invested in runway and other terminal upgrades since the late 1990s.

The plaintiffs alleged breach of contract and breach of fiduciary duty against LAWA, which maintained there was no evidence of a failure to faithfully manage the facility.

Ontario accused LAWA -- and by extension, the city of Los Angeles -- of neglect of the airfield, leaving it at a competitive disadvantage by keeping ramp fees high while lowering them at LAX in order to draw more traffic to the coast.

Supporters of the "Set Ontario Free'' campaign made an offer of $50 million cash, plus the assumption of debts attached to the airport, if LAWA would let it go, according to Roy Goldberg, one of the attorneys representing Ontario.

In 2013, the Ontario International Airport Authority was formed to assume operational responsibilities when and if a transfer occurs.

The OIAA commissioned a study indicating that, without steps to increase the airport's visibility through general promotional campaigns and direct marketing to airlines, the field's future prospects will continue to dim.

Between 2007 and 2013, passenger loads at the airport fell 40 percent, according to the study. However, the trend reversed last year, when passenger traffic expanded about 3 percent, figures showed.

LAWA officials have denied any effort to reduce business at the Ontario airport in favor of LAX, and they have disputed figures in the OIAA study. LAWA noted that flights were added at the airport in 2013, and attributed other reported declines to airlines using smaller aircraft on scheduled routes, accounting for reductions in available seats.

LAWA officials also insisted that airfares from Ontario are "extremely competitive'' and often beat fares available at comparable airports such as Burbank and John Wayne in Orange County.

In the past, Garcetti has spoken in favor of transferring the airport to Ontario, as long as the city is fairly reimbursed.

In April, a judge in Riverside rejected a motion by the city of Los Angeles to have Ontario's lawsuit dismissed. The case has been scheduled to go to trial Aug. 17.

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