Google+
Close

The Corner

The one and only.

An Economic Indicator



Text  



Arthur Laffer likes to cite U-Haul prices as one of his favorite economic indicators. For example, a quick check of the website reveals that renting a U-Haul to move from Los Angles to Austin in the first week of October of this year would cost you $2,525 for a 26-foot truck, whereas renting a U-Haul to move from Austin to Los Angeles on the same day would cost only $935. Conclusion: There is more demand for moves from Southern California to Austin than for moves from Austin to Southern California.

With that in mind, this news item jumped out at me: British Airways has announced that it will begin offering direct flights to Heathrow out of Austin’s Bergstrom airport, the first regularly scheduled transoceanic service out of Austin.

Nice thing for Austin. What’s going on with Southern California’s airports? Los Angeles World Airports, which operates LAX, Ontario, and Van Nuys, took a bit of a beating in terms of passenger volume from 2007 to 2011, but has been making a recovery, having topped its 2007 numbers in 2012, though it served fewer passengers in 2012 than it did in 1999 or 2000. LAX saw its volume go up nearly 3 percent in 2012, but that is in part the result of the consolidation of operations out of struggling smaller airports in the area. Ontario, for example, has been experiencing passenger declines for six years now.

 Aviation consultant Nick Johnson told the authority ONT is on track to handle fewer than 4 million passengers, 25 percent of its capability, this year.

The nine-page report evaluated several factors — passenger growth, air service, and seat capacity — which all pointed to continued declines at ONT.

“We don’t see recovery even on the horizon,” Johnson told the OIAA at a meeting Monday.

Between 2000 and the end of this year, Ontario airport will experience a 41 percent decline in passenger growth, and a 7.8 decline from 2012 to 2013, according to the report.

In short, things in the air are as stagnant as things on the ground for much of California. That’s just one data point, but it is an interesting one. Given the hidebound nature of airport operations, such changes as we are likely to see will happen very, very slowly. But they will come. People will go where the jobs are, jobs will go where the capital is, and capital will go where it is loved. 



Text