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LAX traffic rising out of 2001 slump

The biggest year-to-year gain since 1994 reflects recovery from 9/11. Officials expect
a good summer, but the real test may come after that.

Jennifer Oldham
Los Angeles Times

Passenger air traffic at Los Angeles International Airport hit new highs in March as carriers continued to add flights, signaling that LAX is finally recovering after a prolonged slump following the Sept. 11 terrorist attacks.

A double-digit increase in travelers in March, the largest year-over-year gain since December 1994, portends a busy summer as discount airlines fly more planes out of the airport, experts said.

"The three-year decline that we've experienced since 9/11 is finally reversing itself," said Paul Haney, a spokesman for the city agency that operates the airport. "People are feeling that short of something really catastrophic, like another SARS outbreak, or another terrorist attack, that the recovery is underway."

LAX was among the airports hit hardest by the aftereffects of the terrorist attacks because carriers slashed more flights there and refused to add more until more people started traveling.

To make matters worse, many travelers turned to smaller airports in Southern California to escape long security lines at LAX, helping several of those facilities, such as Ontario International Airport and John Wayne Airport, recover completely from the sharp downturn in travel after Sept. 11.

Then, last spring, the one-two punch of the Iraq war and an outbreak of a mysterious respiratory illness erased hard-fought gains in air traffic at the facility, forcing passenger levels to a six-year low.

Today, the number of daily nonstop flights between LAX and several airports that serve New York City is back to pre-9/11 levels for the first time. Carriers also are adding international flights, with American Airlines launching daily nonstop service between LAX and Tokyo's Narita International Airport last month.

Airport officials and aviation experts attribute the turnaround to the improving economy and the growing popularity of discount air carriers.

And the rising passenger numbers are expected to have a ripple effect at LAX in the form of higher revenues and more customers for surrounding tourism businesses.

"All of the sudden we've gotten our groove back," said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. "Everything seems to be falling in place for a good summer travel season."

A strong showing in spring break bookings in March helped make the first quarter of 2004 the most robust three-month period at LAX since the terrorist attacks. Statistics show that the number of passengers using the airport from January through March jumped to 13.6 million, up 6% from 12.8 million for the same period a year earlier.

In the month of March, passenger traffic jumped 11.3% to 4.9 million from 4.4 million a year earlier — the biggest monthly increase since 1994.

A look at the May schedule shows airlines adding flights from LAX to almost every domestic market. Low-fare carriers also are pumping more service into LAX, with AirTran Airways, Delta's Song and United's Ted listing new flights in the week of May 19 when compared with the same week in 2003. America West and Frontier are adding six more flights that week compared to a similar period a year earlier.

"There are some screaming bargains out there," said Jack Keady, a Playa del Rey-based aviation consultant. "With gasoline over $2 a gallon, we're back to a situation where, in some cases, people are going from vacationing by car to vacationing by air."

The flight gains at LAX will continue into the summer, carriers say. In June, America West will add two daily flights to Washington's Dulles International Airport and a third daily flight to Boston's Logan International Airport and John F. Kennedy International Airport in New York. Southwest Airlines plans to add a flight between LAX and Philadelphia in July.

Other major airports are seeing similar increases, leading analysts to predict that this summer will look like the busy travel seasons before the 9/11 attacks. But that isn't necessarily good news for the airlines.

"The industry as a whole will see passenger volumes quite similar to the summer of 2000, which looks good," said Robert W. Mann Jr., president of the consulting firm R.W. Mann & Co. "On the other hand, what customers are paying is on the order of 15% less, on average, than in 2000. So, while customers as a whole will probably be way up, revenue will lag, as it has since 2001."

Hotel occupancy has already picked up across the region and the daily room rate is rising, Kyser said. Analysts also expect that European tourists will flock to the area to check out new rides at Disneyland, Universal Studios, Legoland and other theme parks. The dollar is weaker than the Euro this year, making America a bargain for European travelers.
But analysts caution about reading too much into summer bargains.

"LAX should be seeing the beginning of a wave that it's going to be surfing all summer," Mann said. "The real question becomes what happens in the fall. The day of reckoning comes after Labor Day."

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