Los Angeles International Airport Forecasts $2b Revenue By 2025 On Higher Airline Fees
Summary
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![LAX Airport]()
Photo: LAWA | Jacob Brosseau
LA World Airports expects a $2 billion revenue increase by 2025 from higher airline fees.
- Terminal restructuring at LAX will improve navigation with consolidated terminals and new gate numbering.
- LAWA’s revenue growth is driven by aeronautical charges, despite rising operating expenses.
Los Angeles World Airports, the authority managing Los Angeles International Airport (LAX) and Van Nuys Airport (VNY), forecasts a $2 billion revenue increase by 2025. This financial growth will be driven by higher airline fees, according to a report by Press-Telegram.
Financial growth
During the Board of Airport Commissioners meeting on May 2, 2024, Chief Financial Officer at Los Angeles World Airports (LAWA), Tatiana Starostina, gave the outlook for LAWA’s 2024-2025 budget.
Photo: LAWA | Jacob Brosseau
According to the outlook, LAWA anticipates its revenues to hit $1.9 billion in 2024, with a projected 8% increase, amounting to $146 million, by 2025, surpassing the $2 billion mark. These operating revenues are expected to grow due to increased airline fees. Starostina mentioned that landing fees and other airline-related charges have totaled $1.5 billion. This revenue stream appears to continue to expand in the coming years.
A contributing factor to the increase in aeronautical revenues is LAWA’s ongoing capital improvement program, which involves modernizing the majority of its terminals. However, despite the anticipated revenue growth, LAWA also expects increased operating expenses. According to Startostina, the expenses will be driven by salary increases, inflation, higher contractual costs, and higher projected activity.
Top 5: Los Angeles International Airport’s Largest Airlines By Market Share
The airport is a hub for a number of carriers.
It is worth noting that during the fiscal year of 2023, LAWA’s operating revenue totaled $1.8 billion, while operating expenses totaled $1.6 billion, according to the airport authority’s financial report for the fiscal year 2023.
Terminal restructuring
LAX is currently reorganizing its terminals and gates to improve wayfinding and will rename and consolidate certain facilities. The airport is now considering altering some of the names, with the proposed changes outlined below:
- Combine Terminal 1 and Concourse 0 into a single Terminal 1.
- Combine Terminal 2 and Terminal 3 into a unified Terminal 2.
- Rename Terminal B (TBIT), including MSC and Bradley West Gates, to Tom Bradley Terminal 3.
- Combine Terminal 7 and Terminal 8 to form Terminal 7.
- Implement a new alphanumeric gate numbering system across all boarding areas.
- Designate the planned Terminal 9 as Terminal 8 instead.
Photo: LAWA | Jacob Brosseau
LAX accommodates approximately 70 million passengers annually, making it one of the busiest airports worldwide. In light of this, the airport accommodates many airlines and is a significant hub for major US carriers. LAWA provided data on the top ten airlines at LAX based on passenger numbers for fiscal year 2023. These airlines include:
- Delta Air Lines, 19.2% of the market share
- American Airlines, 15.6% of the market share
- United Airlines, 15.5% of the market share
- Southwest Airlines, 9.6% of the market share
- Alaska Airlines, 6.6% of the market share
- Spirit Airlines, 4.9% of the market share
- JetBlue Airways, 4.6% of the market share
- Air Canada, 1.8% of the market share
- Hawaiian Airlines, 1.4% of the market share
- Volaris, 1.4% of the market share
What are your thoughts on the anticipated financial growth? Let us know in the comments section below.