lowecur
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City To Buy Back Term 2 & 5 From Carriers At LAX

Mon Jan 08, 2007 10:31 pm

In what looks to be good news for Jetblue and other LCC's, the City of Los Angeles will vote on whether to spend $150M to control Terminals 2 & 5 at LAX. DL looks to be the big loser in this deal, and it's future plans to expand their Pacific and South American routes could take a major hit.

http://www.latimes.com/news/printedi...ry?coll=la-headlines-pe-california
 
congaboy
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Mon Jan 08, 2007 10:58 pm

Interesting and logical that the city goes after the two terminals where bankrupt carriers have agreements. You mention (and the article) that DL is in the crosshairs, but NW has a large presence in T2. It would seem DL and NW have no real recourse other than to buy time. And I am guessing that Virgin is behind the A380 accommodations in T2, since they currently use that facility.
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LAXintl
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 1:20 am

Its certainly a fact that DL usage of T-5 is significantly less than what the facility could handle which is a reason the airport keeps Delta in its cross hairs and remains pretty insistent on terminating the carriers lease of the facility. I know LAWA has actively shopped the facility around to other airlines which definitely could use added room to grow. From what I gather the city is going after DL on several technicalities of having failed to comply with terminal lease requirements, which in turn allows the city to evict DL.

On the other hand, T-2 is a much more active facility that owned and operated by a private consortium whose owners are NWA, Air Canada, and Hawaiian. I suppose those airlines would not refuse entertaining selling the facility back to the airport for a handsome profit after building the facility only about 15 years ago. As far as the A380 comment, T-2 has already committed to getting A380 ready for both Virgin and Air France which have indicated interest in operating the type at LAX, so I'm not sure why the article delves into that.
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TSS
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 1:53 am

Just spitballing here...

Perhaps if LA could buy Terminals 2 and 5, they'd be able to temporarily relocate various airlines out of Terminal 3 while they tore it down and built a new, modern Terminal 3?
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travelin man
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 1:58 am

Quoting TSS (Reply 3):
Perhaps if LA could buy Terminals 2 and 5, they'd be able to temporarily relocate various airlines out of Terminal 3 while they tore it down and built a new, modern Terminal 3?

They may not tear down T3 right away, but I would wonder if AS would be interested in moving to T5?

AS would get FIS facilities (for the Mexico flights), and connectivity with their largest codeshare partners -- DL, AA, and CO (AA and CO connectivity via the tunnels linking T5 with T4 and T6).

Just a thought....
 
BigGSFO
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 2:01 am

Quoting Travelin man (Reply 4):
AS would get FIS facilities (for the Mexico flights), and connectivity with their largest codeshare partners -- DL, AA, and CO (AA and CO connectivity via the tunnels linking T5 with T4 and T6).

This has been speclated on for awhile on these boards.
 
travelin man
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 2:10 am

Quoting BigGSFO (Reply 5):
This has been speclated on for awhile on these boards.

That may be, but if the city takes over control of T5 from DL, it may be a LOT closer to becoming reality.
 
lowecur
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 3:45 am

Just looking at a map because I have never been thru T-5, it looks as though they have room to park 14 a/c. DL also runs some flts through T-6, so that gives them a large number of gates for just 45-50 flts per day. That is not good utilization, and the City is losing their shirt on landing fees for those gates.

The vote may come down today, so it will be interesting to see if DL gets an injunction if LAX buys the terminal and evicts them.

T-2 looks smaller and I'm not sure what kind of utilization they get there. LAX doesn't seem as hardnosed with NWA as they are with DL, but I know they certainly want to free up LAX to allow more LCC expansion.
 
BigGSFO
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RE: City To Buy Back Term 2 & 5 From Carriers At L

Tue Jan 09, 2007 3:52 am

Quoting Lowecur (Reply 7):
T-2 looks smaller and I'm not sure what kind of utilization they get there. LAX doesn't seem as hardnosed with NWA as they are with DL, but I know they certainly want to free up LAX to allow more LCC expansion.

Well I am sure there is some strong lobbying going on behind the scenes from those airlines who want to move into T5 as well.

And you though the TV drama LAX was cancelled. He we go with a new episode only without Heather Locklear!  Smile
 
travelin man
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 4:10 am

Quoting BigGSFO (Reply 8):
Well I am sure there is some strong lobbying going on behind the scenes from those airlines who want to move into T5 as well.

And you though the TV drama LAX was cancelled. He we go with a new episode only without Heather Locklear!

Agreed....

Based on the article, it doesn't sound like there is a whole lot that DL (or NW et al) can do if LAWA decides to pay off the bonds.

Of course, DL could threaten to cancel its Latin American expansion from LAX, but I doubt LAWA is quaking at the prospect of losing some CRJ flights to secondary Mexican cities.

And if AS is indeed interested in T5, LAWA gets the added bonus of freeing up some space at TBIT (which AS currently uses for its Mexican arrivals).
 
DFWEagle
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 4:14 am

Quoting BigGSFO (Reply 8):
Well I am sure there is some strong lobbying going on behind the scenes from those airlines who want to move into T5 as well.

If the city were to take control of Terminal 5, I think that AA would definitely be interested in leasing a small number of gates in the terminal.

At present, AA’s current Terminal 4 facility is operating at it’s absolute maximum capacity - especially the FIS gates, of which there are not many at all. This is one of the principal reasons why AA did not apply for LAX-PEK service for the 2007 US-China frequency allocation, opting for DFW instead. It is also the major barrier blocking AA expanding any further at LAX. If AA had more space, I am sure they would continue building up their presence at LAX, as they have been doing consistently for the past few years. I would even venture to suggest that they may even apply for a LAX-China route in the 2008 China frequency allocations.
Ryan / HKG
 
BigGSFO
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 4:26 am

Quoting Travelin man (Reply 9):
And if AS is indeed interested in T5, LAWA gets the added bonus of freeing up some space at TBIT (which AS currently uses for its Mexican arrivals).

Agreed. And AS can be adjacent to AA and CO whom they code-share with. This could make these agreements more beneficial by having less hassle switching between airlines.

Quoting DFWEagle (Reply 10):
If the city were to take control of Terminal 5, I think that AA would definitely be interested in leasing a small number of gates in the terminal.

At present, AA’s current Terminal 4 facility is operating at it’s absolute maximum capacity - especially the FIS gates, of which there are not many at all. This is one of the principal reasons why AA did not apply for LAX-PEK service for the 2007 US-China frequency allocation, opting for DFW instead. It is also the major barrier blocking AA expanding any further at LAX. If AA had more space, I am sure they would continue building up their presence at LAX, as they have been doing consistently for the past few years. I would even venture to suggest that they may even apply for a LAX-China route in the 2008 China frequency allocations.

Also agreed. The Eagle remote terminal is slated to be taken down to make way for the new taxiway and AA will need to find a place to run this operation. Obviously T5 would be perfect. I do agree that AA could (and would once they move into "expansion mode" again) increase their LAX operation. But their current terminal space is maximized.

However if the true intent behind this proposed terminal purchase is to indeed expand LCC, then AS and AA both might not factor into this equation. Most likely though they are probably both lobbying their best interests, as is those carriers who can be displaced or disadvantaged by this, such as NW, DL, etc. I guess it depends on who's agenda coincides with the airport authority's the most. We shall see.
 
DFWEagle
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 4:40 am

Quoting BigGSFO (Reply 11):
The Eagle remote terminal is slated to be taken down to make way for the new taxiway and AA will need to find a place to run this operation. Obviously T5 would be perfect.



Quoting BigGSFO (Reply 11):
However if the true intent behind this proposed terminal purchase is to indeed expand LCC, then AS and AA both might not factor into this equation.

I agree – AA would need far more than just a bit of space to move the entire Eagle operation and I’m practically certain that LAWA would never let them use T5 gates for predominantly tiny turboprop flights. They could be much better used by other carriers with mainline equipment, especially those that increase low cost competition.

However, if AA made a fair and reasonable offer to lease just a few gates for mainline flights, I think the city would agree. AA has an excellent gate utilisation at LAX and genuinely needs more space to expand.
Ryan / HKG
 
lowecur
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 4:48 am

Quoting BigGSFO (Reply 11):
However if the true intent behind this proposed terminal purchase is to indeed expand LCC, then AS and AA both might not factor into this equation.

Yeah, I doubt they do. They both already have a significant presence at the airport, and I believe the city wants to open it up for new LCC entrants as well as those that have a small presence at the airport. I think the following statement infers that:

"I do believe it will increase competition at the airport and produce immediate gains in nonstop service and, particularly where new service is by low-cost airlines, produce lower fares for Los Angeles-area consumers," said Samson Mengistu, deputy executive director for administration and finance at the city's airport agency.

Here's the link so you don't have to register:

http://ktla.trb.com/news/la-me-lax8j...8,0,3898294.story?coll=ktla-news-1
 
WA707atMSP
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 8:06 am

If this happens, it'd be nice if there was a gate swap, with US, AC, and NZ moving from T1 and T2 to T6, to be closer to UA, and DL and CO moving from T5 / T6 to T1 / T2 to be closer to NW, AF, and KL.
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boswashsprstar
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 9:23 am

Quoting WA707atMSP (Reply 14):
If this happens, it'd be nice if there was a gate swap, with US, AC, and NZ moving from T1 and T2 to T6, to be closer to UA, and DL and CO moving from T5 / T6 to T1 / T2 to be closer to NW, AF, and KL.

It's unlikely that US would move unless absolutely forced to do so, since removing US from T1 would allow WN to grow at LAX (as it wants to do). It's a shame when customer convenience is sacrificed in the name of charging the customer higher prices . . .
 
iahflyer
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 9:45 am

Isn't at least one of these terminals being torn down anyways w
ith the new LAX Master Plan???
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LAXintl
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 10:24 am

Quoting WA707atMSP (Reply 14):
If this happens, it'd be nice if there was a gate swap, with US, AC, and NZ moving from T1 and T2 to T6, to be closer to UA, and DL and CO moving from T5 / T6 to T1 / T2 to be closer to NW, AF, and KL.

I'm aware LAWA has been in talks for atleast two years on a multi-carrier terminal swaps, however could never come to terms based on who would pay whom for the facility moves and required renovations.
City assuming both T-5 and potentially T-2 would certainly help unlock some of the roadblocks.

Quoting IAHFLYER (Reply 16):
Isn't at least one of these terminals being torn down anyways w
ith the new LAX Master Plan???

No. As part of the "greenlighted" projects all terminals remain. There was an option of relocating north side runways, which would entail destroying T1-3 and building a new concourse, however that option was not approved as part of the Master Plan court settlement in 2005.

Quoting BigGSFO (Reply 11):
The Eagle remote terminal is slated to be taken down to make way for the new taxiway and AA will need to find a place to run this operation.

Indeed the AE terminal will go away. So will all of AA's maintenance hangarage at LAX, so the carrier does have some major decisions to make regarding any remaining AE presence at the airport, and if the carrier wishes to exercise an option to build a single replacement hangar.
Tough long term decisions.
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ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 1:28 pm

Quoting Lowecur (Thread starter):
DL looks to be the big loser in this deal, and it's future plans to expand their Pacific and South American routes could take a major hit.

Wow, that is more than I could have hoped for in the DL lease default scenario. I was expecting them to have to give up slots in T6, but turning T5 over to the airport, that means CO or AA could bid for gates and the crown room area in T5, and reopen the T4-T5 tunnel as well. DL would have to bid like anyone else, and if US took on DL, then T5 would be a good place for the combined airline. It'll be interesting to see how it shakes out.
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aaway
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 2:22 pm

Quoting Lowecur (Reply 7):
Just looking at a map because I have never been thru T-5, it looks as though they have room to park 14 a/c.

In its original, post-WA merger, configuration, T-5 boasted 16 gates. When the nature of DL's LAX operations changed - with the subsequent changes in fleet mix - DL reduced the number of gates in order to accommodate the new fleet mix.

Quoting DFWEagle (Reply 10):
If the city were to take control of Terminal 5, I think that AA would definitely be interested in leasing a small number of gates in the terminal.

Early last year, AA attempted to negotiate with DL in order to lease four gates in T-5. DL rebuffed the overture. AA, like other potential carriers interested in T-5, is awaiting the outcome of the bankruptcy proceedings.

Quoting DFWEagle (Reply 10):
At present, AA's current Terminal 4 facility is operating at it's absolute maximum capacity - especially the FIS gates, of which there are not many at all. This is one of the principal reasons why AA did not apply for LAX-PEK service for the 2007 US-China frequency allocation, opting for DFW instead. It is also the major barrier blocking AA expanding any further at LAX. If AA had more space, I am sure they would continue building up their presence at LAX, as they have been doing consistently for the past few years.

I'm going to disagree here, albeit slightly. There are periods in which AA's 2 FIS gates are well utilized - the 07:00 to 12:00N period with QF and NRT. The early afternoon has the Central America arrivals and LHR. Beyond 16:00, and prior to the 20:00 arrival rush, at least one FIS gate is available.

The limited gate availability certainly narrows the scheduling window of a potential LAX-China-LAX operation. A theoretical PEK arrival during the 17:00 hour would have limited connectivity to AA's domestic system, based upon the current schedule (but a 23:00 hour departure would benefit from great domestic connectivity).

Further, regarding facilities constraints...QF is a major hindrance to AA's potential schedule growth at LAX. Particularly that morning period when three gate positions are occupied. However, this is the tradeoff for having assistance in paying the rent at T-4. Plus, QF received such a lucrative ground handling deal from AA that QF will not be moving anytime soon.

Quoting Congaboy (Reply 1):
Interesting and logical that the city goes after the two terminals where bankrupt carriers have agreements. You mention (and the article) that DL is in the crosshairs, but NW has a large presence in T2. It would seem DL and NW have no real recourse other than to buy time. And I am guessing that Virgin is behind the A380 accommodations in T2, since they currently use that facility.

There were provisions in the bond financing and lease agreements whereby leases could be revocated due to the bankruptcy of the lessee. IMO, LAWA is more interested in imposing new lease terms - a financial windfall and a more efficient gate usage protocol for LAWA - than fostering new LCC competition.

Frankly, I don't see any LCC being establishing a major prescence, or relocating, and absorbing the higher costs of operating in a terminal with FIS facilities. And LAWA isn't going to close FIS facilities in order to lower said costs.

As for DLs and NWs options - litigation.
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N1120A
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 7:46 pm

Quoting Travelin man (Reply 4):
AS would get FIS facilities (for the Mexico flights),

AS needs to pony up the cash, which they have been reluctant to do.
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ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Tue Jan 09, 2007 8:10 pm

Quoting N1120A (Reply 20):
AS needs to pony up the cash, which they have been reluctant to do.

Because they don't want to throw money into the hole that is T3.

T5 would suit them fine, and they'd pay higher rents for it.
Of all the things to worry about... the Wookie has no pants.
 
rolo987
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 12:20 am

They voted yesterday to buy back the bonds and take over the two terminals.

http://www.latimes.com/news/local/lo...y?coll=la-commun-los_angeles_metro
 
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Zkpilot
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 2:24 am

Quoting IAHFLYER (Reply 16):
Isn't at least one of these terminals being torn down anyways w
ith the new LAX Master Plan???

Last I saw there were plans to demolish terminals 1-3 and clip that side of TBIT to make way for relocated runways and taxiways. The Inner carparks were to all disappear to make way for one large modern terminal with satellite concourses where T1-3 were originally. Not sure if this is still going ahead or not, if not then that really is a shame... in fact all the terminals at LAX need to be demolished and replaced (except perhaps TBIT but even that is due for a renovation). LAX is poorly designed and isn't made to accomodate 777, 747, A340, A380 sized aircraft. Sure it CAN handle them but wasn't designed to. These aircraft need to spend wasteful time being towed onto their gates slowwwwwwwwly and being pushed back slowwwwwwwly whilst waiting for aircraft on the (wrongly located) taxiways. The end result is that it takes a 747 about an extra 30 mins at LAX on average for each flight. Turnarounds are very rarely less than an hour as they are at other airports. Often at LAX they are 2 hours.
Let alone the pax and crew who have to go thru a long arrivals/departures process (not helped by the TSA/Immigration being slow).
Still there are worse out there  Wink
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EddieDude
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 2:56 am

At the moment, AM departures are from T6 and its arrivals are at T5. Do you think that this move by the city will result in AM consolidating its operations in one single terminal?
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
jfk777
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 3:17 am

AA would gain from T5 since Delta shares an FIS with UAL from Terminal 6 & 7. If it could move its Tokyo and LHR flights to T5 for customs and improve Qantas's access to the FIS gates at T4. I've seen AA 763 arrive from LHR(pre-777 days of AA) and use T5 customs. T5 could become like T6, a shared terminal with 2 or 3 core users.

I think the best thing for ONEWORLD at LAX with the JAL, BA, CX & QF flights is to takeover(build new) T3, the old TWA terminal. These four airlines operate 15 744 daily at LAX, a huge block of the airports international business. The Star alliance has a respectible block too with: Lufthansa, ANZ, ANA, Singapore, Thai, Asiana and UA. Star is all over though, T2, T6, T7, and Bradley building. LAWA should put T3 out of use and build a new symbol for teh international tarffic on the T3 site. ONEWORLD and Star could be the primary tennants.
 
LAXintl
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 3:23 am

Quoting Zkpilot (Reply 23):
Not sure if this is still going ahead or not

No as previously mentioned this was not one of the "green lighted" projects. There again was some recent rumbles about runway relocation on the Northside, however Mayor Villaraigosa whom was able to unlock the legal logjam to get the masterplan moving again stated he remains against such a move due to the neighborhood impact to the Westchester area.

Quoting EddieDude (Reply 25):
At the moment, AM departures are from T6 and its arrivals are at T5. Do you think that this move by the city will result in AM consolidating its operations in one single terminal?

Actualy AM, 95% of the time uses gates in T-5 being a Delta sub tenant, with only the rare flight using a DL T-6 gate. AM's ticket counters are somewhat in confusing sitting in the area between T-5 and T-6, however they are a T-5 tenant and would pretty much have their future tied into DL's fate at the airport unless they decide to move out on their own and he handled by another party.
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EddieDude
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 4:04 am

Quoting Laxintl (Reply 26):
AM, 95% of the time uses gates in T-5 being a Delta sub tenant, with only the rare flight using a DL T-6 gate. AM's ticket counters are somewhat in confusing sitting in the area between T-5 and T-6

Thanks a lot for the clarification. So if someone gives me a ride to LAX to catch an AM flight, T5 is where I need to be taken to, right?

And if for any reason my plane leaves from a T6 gate, I can access it easily from the check-in area, correct?

Sorry for hijacking.
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
LAXintl
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 4:26 am

Quoting EddieDude (Reply 27):
So if someone gives me a ride to LAX to catch an AM flight, T5 is where I need to be taken to, right?

Yes.. just stop beyond the DL T-5 counters closer/towards T-6 and that is where AM counters are located.

Quoting EddieDude (Reply 27):
T6 gate, I can access it easily from the check-in area, correct?

Yup.. Just go thru T-6 security to the left of the AM counters.


Enjoy your trip  airplane 
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ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 4:39 am

Quoting Laxintl (Reply 28):
Yup.. Just go thru T-6 security to the left of the AM counters.

Or through the T5-T6 tunnel. I saw it closed at 3AM, but i assume it stays open until the last red-eyes take off, right?
Of all the things to worry about... the Wookie has no pants.
 
JetBlueGuy2006
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 4:56 am

Interesting, I will be looking out for the results of this, BUT, I think that the title is misleading. The city might buy it back, it doesn't not mean that it has already been decided.
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ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:07 am

Quoting JetBlueGuy2006 (Reply 30):
Interesting, I will be looking out for the results of this, BUT, I think that the title is misleading. The city might buy it back, it doesn't not mean that it has already been decided.



Quoting Rolo987 (Reply 22):
They voted yesterday to buy back the bonds and take over the two terminals.

Who's right? Only time will tell...  

Quote:
"Currently, 15 airlines operate 52 domestic and international flights daily out of the 10 wide-body aircraft gates at Terminal 2, making it nearly impossible to add additional capacity," said a written statement from LAX Two Corp., an organization that represents airlines in Terminal 2.

That sounds like at minimum 20% underuse of those gates.

And DL is far worse at T5, not only underusing it, but exploiting their contract with LAX to keep gates at T6 to prevent expansion by others. In the mean time, CO and QF and AA are overflowing most of the time. DL, from my layman's view of being at T4, T5 and T6 at all times of day, is underusing their gates by 33-50%. They may plan to "expand" but why should they be able to sit on gates, while in default of their leases, and prevent others from expanding while they grow when they feel like it?

I think LAX is on to something. Rather than spending billions to increase gate space right now, they are spending $150m to increase utilization of current gates. Between T3 and T5 they can get 25-30 more flights a day. They can also eventually force UA to use T8 as contractually obligated, and free up gates for other widebodies (though I think that will require the building of a dedicated multi-airline commuter terminal for UA and AA)

[Edited 2007-01-09 21:08:28]
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LAXintl
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:08 am

Quoting JetBlueGuy2006 (Reply 30):
The city might buy it back, it doesn't not mean that it has already been decided.

Per reply 22 the Airport Commision voted yesterday to go ahead with this plan.

Here is a breif quote from the LA Times article;


PANEL ACTS TO CONTROL LAX TERMINALS
The city Airport Commission votes to use up to $154 million to end airline leases at two facilities and open up slots for other carriers.

January 9, 2007

Despite intensive lobbying from airline representatives to delay the matter, the city's Airport Commission voted unanimously on Monday to spend up to $154 million to take over several terminals at Los Angeles International Airport.

By gaining control of Terminals 2 and 5, airport officials hope to free up aircraft parking spots for discount carriers and other airlines that have repeatedly asked to add flights at the world's fifth-busiest airport.

Airlines that operate in the two terminals said they will fight the takeover in court, contending the airport agency would be violating the terms of their leases.

"We're very disappointed," said Robert S. Span, an attorney with Paul Hastings, who represents Delta Air Lines, which operates in Terminal 5, and an organization of carriers that offer flights in Terminal 2. "We're going to evaluate our legal options."

But airport officials say the terms of the carriers' leases specifically allow the airport agency to buy back bonds the airlines used to finance improvements to the terminals.
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surfdog75
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:10 am

Wonder who's pushing them to vote on this now before the US takeover is decided? Sounds pretty fishy. That terminal would be ideal for the combined carrier, although I hate the merger idea.

If approved it would, in effect, dictate the expansion plans of a company that has been a loyal tenant for years. BS in my opinion, but it wouldn't be surprising from a city as well run as LA.
 
travelin man
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:19 am

Quoting Surfdog75 (Reply 33):
If approved it would, in effect, dictate the expansion plans of a company that has been a loyal tenant for years. BS in my opinion, but it wouldn't be surprising from a city as well run as LA.

Um, so what? An airport is first and foremost a public need. LAWA is responding to that public need by doing what they are contractually allowed to do -- pay off the bonds and take over the operation. DL has underutilized T5 for YEARS, and if other carriers want to expand (and not just with a few CRJs to Mexico), the people of LA will benefit.

A "loyal tenant"???? From what I've read, DL is not even current on its rent. Hardly a model tenant.
 
AADC10
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:19 am

Quoting Laxintl (Reply 2):
I suppose those airlines would not refuse entertaining selling the facility back to the airport for a handsome profit after building the facility only about 15 years ago.

The airlines would not profit from the construction in their terminals. They would simply have their bonds that they have been paying interest on purchased, so they would no longer have to pay interest but they would need to negotiate a new lease.
 
lowecur
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:20 am

Quoting Surfdog75 (Reply 33):
Wonder who's pushing them to vote on this now before the US takeover is decided? Sounds pretty fishy. That terminal would be ideal for the combined carrier, although I hate the merger idea.

If approved it would, in effect, dictate the expansion plans of a company that has been a loyal tenant for years. BS in my opinion, but it wouldn't be surprising from a city as well run as LA.

It's a done deal, it's just a matter of whether DL can get a judge to issue an injunction if LAWA evicts them. My guess is they will give them 90-180 days to clear out, and in the meantime will sign leases with Jetblue and a few other low cost carriers. DL will be offered a presence, but it will be at the new rates and will be based upon a maximum recent history or less.
 
surfdog75
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:29 am

Quoting Lowecur (Reply 36):
It's a done deal, it's just a matter of whether DL can get a judge to issue an injunction if LAWA evicts them. My guess is they will give them 90-180 days to clear out, and in the meantime will sign leases with Jetblue and a few other low cost carriers. DL will be offered a presence, but it will be at the new rates and will be based upon a maximum recent history or less.

90-180 days? You have to be joking. This will drag out until the cows come home. When a long-term lease is signed it needs to be honored. Businesses take the risk of signing them so they can be certain of the future environment. The BK judge will have some say also. Hopefully the record of campaign contributions to the council will be looked at. Government should not be in the business of encouraging one business model over another.

[Edited 2007-01-09 21:34:39]
 
ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 5:41 am

Quoting Lowecur (Reply 36):
My guess is they will give them 90-180 days to clear out, and in the meantime will sign leases with Jetblue and a few other low cost carriers.

If they did that, expect lawsuits all around. There are airlines that already overuse their gates begging for spots to park jets, and if this is all about shoving DL aside so B6 can come in, feels an awful lot like what ORD just did.

B6 would not offer any new cities nor lower fares, so what value is it? What other LCCs don't serve LAX?

There's more value in US moving to T5 instead of being crammed into T1 with WN, and AS getting to move. WN has been begging for gates, and that would help. Let B6 come to T3 or T1, in other words, after the dedicated customers get their chance to negotiate leases at T5.

As for T2, I think you could see one of the Mexico carriers move there from T5 or T6, as they really operate at night when the other international ops at T2 have wound down. I'd love to see HA get a shot at T5 as well.

I think the "unified front" the airlines are showing with one lawyer might break down with some of the players in T2 realize they could buy T5 access out of this, a much nicer facility...
Of all the things to worry about... the Wookie has no pants.
 
JetBlueGuy2006
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 6:02 am

Quoting Laxintl (Reply 32):
Per reply 22 the Airport Commision voted yesterday to go ahead with this plan

 checkmark 

Gotcha, thanks for the correction
Home Airport: Capital Region International Airport (KLAN)
 
lowecur
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 6:08 am

Quoting Ikramerica (Reply 38):
If they did that, expect lawsuits all around. There are airlines that already overuse their gates begging for spots to park jets, and if this is all about shoving DL aside so B6 can come in, feels an awful lot like what ORD just did.

Yeah, the DL attorney knows that they are the targets in this little revamp, but they also represent the owners of T-2. It will be interesting to see how it plays out, but my guess is they will move for eviction immediately with DL being moved to the number of gates that match the proper utilization. DL will then be given a set amount of time to sign a new lease. Again, the only thing that stops this is an injunction by a judge. LAWA is fed up with DL and many of the other carriers that have underutilized their gates and conspired to keep new carriers from entering the market. I know they wanted to break the leases with UAL because of their poor utilization and failure to keep current on lease payments in 2005. That got resolved, but this is a beast of a totally different nature. These few paragraphs set the tone from the LAWA:


"We're very disappointed," said Robert S. Span, an attorney with Paul Hastings, who represents Delta Air Lines, which operates in Terminal 5, and an organization of carriers that offer flights in Terminal 2. "We're going to evaluate our legal options."

But airport officials say the terms of the carriers' leases specifically allow the airport agency to buy back bonds the airlines used to finance improvements to the terminals.

Once these bonds are paid off, the agency can terminate the leases, officials say. The agency said it will move immediately to use cash and credit to buy back the bonds.

Through long-term leases, five carriers control a majority of gates at LAX, leaving airport officials unable to accommodate many requests from other airlines to add flights. More than 60 passenger airlines offer service at LAX.

LAX is unusual in that it operates only 3 1/2 of its nine terminals, through what officials now call an outdated arrangement. Most other major airports control a majority of their facilities.

The city's airport agency says several of the five carriers with long-term leases hoard their gates and use them inefficiently.

"We know that there are airlines that can use some of these underutilized gates," said Airport Commissioner Walter Zifkin. "We have a duty of fulfilling a public trust here."
 
ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 6:13 am

Quoting Lowecur (Reply 40):
LAWA is fed up with DL

And considering DL is in default on payments, they are on shaky ground anyway. Further, with DL being in BK, don't lessors have also a greater opportunity to break leases as long as the terms are fair? LAX is a creditor to DL and can ask for relief from the courts, can't they?

DL can share the 13 gates at T6 (most of them widebody) with UA, and there's the President's club space to move the Crown Room to. DL's ops don't warrant access to the 17 gates they have now, most of them exclusive. The security line at T6 has been rebuilt and it works well, so if DL wants a better terminal, they can use their refunded bond money to pay for whatever changes they want for T6.

That would leave T5 for more carriers. AA can have access to 3-4 shared use gates. CO could get 4 exclusive and access to 4 shared and move the P-Club. HA can have exclusive use of 2 gates at certain times of day. AS could have 4 exclusive and access to 5 shared use. T2 without HA and with better utilization opens up 15 flights a day. AS out of T3 opens up quite a few gates and relieves stress on TBIT...

[Edited 2007-01-09 22:28:21]
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aaway
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 7:17 am

Quoting Jfk777 (Reply 25):
AA would gain from T5 since Delta shares an FIS with UAL from Terminal 6 & 7. If it could move its Tokyo and LHR flights to T5 for customs and improve Qantas's access to the FIS gates at T4. I've seen AA 763 arrive from LHR(pre-777 days of AA) and use T5 customs. T5 could become like T6, a shared terminal with 2 or 3 core users.

The FIS that UA built underground between T-6 & T-7 is theirs to use exclusively.

AA could get creative in accommodating additional international operations during peak time periods. The problem lies with the additional costs AA would incur in being creative.

A return to T-5 for some FIS clearance results in DL charging AA on a fee-per-use basis. The other option - relying on a remote / bussing operation - would be less costly, but a pain logistically.

Quoting Jfk777 (Reply 25):
I think the best thing for ONEWORLD at LAX with the JAL, BA, CX & QF flights is to takeover(build new) T3, the old TWA terminal.

The scuttlebutt from one of the earlier (Richard Riordan era) iterations of the Master Plan had Star occupying a new midfield terminal and oneworld taking up residence at TBIT. Still may happen since the midfield terminal will apparently be built at some point.

Quoting Ikramerica (Reply 41):
And considering DL is in default on payments, they are on shaky ground anyway. Further, with DL being in BK, don't lessors have also a greater opportunity to break leases as long as the terms are fair? LAX is a creditor to DL and can ask for relief from the courts, can't they?

Such a provision is contained in the lease between DL and LAWA. LAWA has indeed asked the bankruptcy court for relief. DL has received stays twice.
"The greatest mistake you can make in life is to continually be afraid you will make one." - Elbert Hubbard
 
ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 7:22 am

Quoting Aaway (Reply 42):
Such a provision is contained in the lease between DL and LAWA. LAWA has indeed asked the bankruptcy court for relief. DL has received stays twice.

Then this explains this move, though T2 is getting taken for a ride in the process.

LAWA has now cleared a hurdle for relief, by taking over DL's T5 debt load. I assume they did the same for T2 because it was easier to do it all at once (and probably wish they had done this when UA was still in BK).
Of all the things to worry about... the Wookie has no pants.
 
aaway
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 7:41 am

Quoting Ikramerica (Reply 43):
Then this explains this move, though T2 is getting taken for a ride in the process.

LAWA has now cleared a hurdle for relief, by taking over DL's T5 debt load. I assume they did the same for T2 because it was easier to do it all at once (and probably wish they had done this when UA was still in BK).

 checkmark  Safe to say that LAWA learned from the UA bankruptcy. LAWA wanted UA to relinquish gates in T-6. And UA continues to flaunt LAWA policy on commuter operations.
"The greatest mistake you can make in life is to continually be afraid you will make one." - Elbert Hubbard
 
N1120A
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 8:21 am

Quoting Aaway (Reply 44):
And UA continues to flaunt LAWA policy on commuter operations.

That has essentially been settled.

Quoting Ikramerica (Reply 38):
There's more value in US moving to T5 instead of being crammed into T1 with WN, and AS getting to move.

US has balked at a move from T1 because of the excellent location and status they hold as the successor to PSA

Quoting Jfk777 (Reply 25):
AA would gain from T5 since Delta shares an FIS with UAL from Terminal 6 & 7.

No they don't. T5's FIS is seperate from the T6/7 FIS, which is dedicated to United

Quoting Ikramerica (Reply 21):
Because they don't want to throw money into the hole that is T3.

T3 wouldn't be a hole if they were actually willing to spend the money.

Quoting Ikramerica (Reply 21):
T5 would suit them fine, and they'd pay higher rents for it.

Actually, that was my point. LAWA has offered them as much before, and they didn't want to spend the money.
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ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 8:52 am

Quoting N1120A (Reply 45):
US has balked at a move from T1 because of the excellent location and status they hold as the successor to PSA

Were they offered T5?

Quoting N1120A (Reply 45):
Actually, that was my point. LAWA has offered them as much before, and they didn't want to spend the money.

Were they offered T5?

Maybe they were, but I don't see how since T5 has been on long term lease to DL.

If I were AS or UA, I wouldn't move to T6 or wherever. But T5, with lots of room to operate, FIS and new facilities is a whole different ball game...
Of all the things to worry about... the Wookie has no pants.
 
N1120A
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 9:01 am

Quoting Ikramerica (Reply 46):
Were they offered T5?

US can't fill T5 as it is and they have balked at a move to T6 before.

Quoting Ikramerica (Reply 46):
Were they offered T5?

AS has been offered T5 and has balked at the price, which is higher than the sweetheart deal they get now. They have also been offered a similar control deal at T3 to what NW, AC and HA have at T2, which would essentially allow them to pay for the upgrades it desperately needs by charging other carriers rent.

Quoting Ikramerica (Reply 46):
If I were AS or UA, I wouldn't move to T6 or wherever.

I take it you mean US, because UA has absolutely no reason to move.

Quoting Ikramerica (Reply 46):
But T5, with lots of room to operate, FIS and new facilities is a whole different ball game...

T5 isn't particularly new, it is just nicer than T3. Further, AS would have to actually pony up the dough to move over, as would US. Going beyond that, US doesn't really have all that much of a need for an FIS, given their limited international operation at LAX, and if they did move to T6, it is likely that United would allow them to use the FIS. I actually think that a CO/US swap would be in the best interests of both airlines, seeing that even if CO decided to try international from LAX again they wouldn't be allowed to use the FIS in T6 anyway.
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LAXintl
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 9:18 am

US Airways is not about to move anywhere at LAX.

The carrier actually just embarked a expensive 6-month long project related to the US/HP integration that will see many non public T-1 facilities renovated and merged including bag room, baggage service, ramp and maintenance facilities along with new mezzanine offices above the ticket counters.

Prior to the US/HP merger US Air was one of the carriers potentially involved in multi carrier terminal swaps which LAWA was trying pull off, however now with the merger the carrier appears very content to stay at T-1. Also from a competitive point of view, I cant see larger new US Air abandoning T-1 now to SWA which would provide that carrier carte balance to launch massive expansion at LAX from which it has been limited to about 110 daily flight for the last 5 years.
From the desert to the sea, to all of Southern California
 
ikramerica
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RE: City To Buy Back Term 2 & 5 From Carriers At LAX

Wed Jan 10, 2007 10:05 am

Quoting N1120A (Reply 47):
US can't fill T5 as it is and they have balked at a move to T6 before.

Quoting Ikramerica (Reply 46):Were they offered T5?
AS has been offered T5

Who says US would need to fill T5? They don't fill T1, they share it. And while I don't hate T6 as a customer, as an airline, I'd balk at T6 too...

How could they be offered T5 when DL was the lease holder? Why would AS take it seriously and not wonder if there were other motives to the offer?

And I'm assuming that if US is thinking of merging with DL, T1 isn't going to cut it.

Since we are ruling out all these major carriers that could move, then what exactly is the point of LAWA taking these terminals back?
Of all the things to worry about... the Wookie has no pants.

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