ONTARIO -- It is a question that often comes up - why would Los Angeles World Airports want to keep a struggling airport rather than focus its attention entirely on modernizing the region's largest airport, Los Angeles International?

For the past four years, Ontario officials have contended that L.A./Ontario International Airport has been neglected by LAWA, the medium-hub facility's owner and operator, which in turn has led to the slow demise of passenger activity. Last year, about 4.5 million passengers traveled in and out of ONT, a figure so low it was last seen more than two decades ago.

In the past several months, officials from Los Angeles, which oversees LAWA, and the city of Ontario have been in negotiations over transferring control of the airport.

"The city of L.A. needs appropriate compensation for investments in ONT," said Maria Tesoro-Fermin, spokeswoman for LAWA, which owns and operates LAX, ONT and Van Nuys Airport. LAWA also controls L.A./Palmdale Regional Airport.

LAWA may want to hold onto ONT for several reasons, including its potential growth and because of the value it may bring to its regional system, said Marcia Godwin, associate professor of public administration at the University of La Verne.

"I do think their authority sees it as a regional system that makes them more competitive," Godwin said.

At the same time, LAWA may keep ONT because of the investments it has made already there, she said.


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But Greg Lindsay, co-author of "Aerotropolis: The Way We'll Live Next," said he believes it would be better for Ontario to have control of the airport.

"They might as well split it off because LAWA is in a massive conflict of interest out there. They should be expanding LAX, but, if they do, they have less and less interest in Palmdale and Ontario," said Lindsay, a featured speaker recently at Ontario's State of the City event

The past four years, Lindsey notes, have been some of the best years in the history of the airline industry. Most airlines recorded significant profits in 2010 because the airline industry has focused on consolidation, stripping capacity out of the system and controlling ticket prices.

"It's a critical juncture for ONT," he said, "and LAWA needs to be boosting service right now, and that's why city control is a good thing; neglect is not going to help."

ONT's history with LAWA dates back to 1967, when Los Angeles, at the request of Ontario, started managing and developing the Ontario airport, which at the time was serving less than a million passengers.

Los Angeles officials contend they have invested more than $560 million to improve the airport from a combination of LAX and ONT revenues, Federal Aviation Administration grants and bond proceeds.

In February 2012, the city of Ontario made a $50 million offer to gain control of ONT as part of a $250 million package that the city would send to Los Angeles to transfer title and operations of the facility. The city would have also been responsible for paying the remaining $75 million in debt obligations.

Ontario officials have agreed to divert $125 million of ONT's future passenger facility charges to LAX. The passenger facility charge is a program that allows airports to collect a separate fee for every passenger. Airports use these fees to fund FAA-approved projects.

Late last year, after a lengthy battle about who should control the airport, LAWA and Ontario officials entered into negotiations. The two sides have since released their own reports on the airport's worth, which could indicate both parties are far from reaching a deal.

A report commissioned by LAWA found the airport, depending on growth in the next 50 years, could be worth up to $605 million. But a report out last week from the Ontario International Airport Authority found the airport, based on current conditions, could cost more than what it's worth. The authority was set up to manage ONT, should control shift.

"We've been in negotiations with the Ontario Airport Authority about divestiture, and we continue those discussions," Tesoro-Fermin said.

The recent valuations of the airport demonstrates to Godwin that it is no longer a question of whether a deal can be made but a question of how.

"Both sides are starting with the estimates most favorable to their own positions," she said. "The proposed airport authority would like to avoid major debt financing and reserve some resources for improvements and marketing. Los Angeles World Airports wants compensation for its original investment and to show that the airport has been successful under its management."

Godwin said she believes if a deal is reached, it will be much closer to Ontario's original offer than to either party's estimated valuation.

But Tesoro-Fermin said LAWA wants to avoid participation in negative public debate and activities that may create an adverse environment for ONT's stakeholders and the public ONT serves.

The Los Angeles Board of Airport Commissioners, LAWA's governing board, has directed staffers to concentrate on aggressively managing the airport in light of current market realities.

"LAWA remains focused on cost containment successes and attempting to develop air service opportunities for ONT," Tesoro-Fermin said.


Reach Liset via email, call her at 909-483-8556, or find her on Twitter @DBOntarioNow.