Dive Brief:
- American Airlines this week kicked off construction on a $1.6 billion renovation of its Los Angeles International Airport terminals, representing the biggest single-airport investment the company has ever made, according to Los Angeles World Airports.
- Planned work includes a complete overhaul and modernization of Terminal 4; reconfiguration of the Terminal 5 ticket lobby, which is underway now; a 300,000-square-foot, 30-gate facility that will serve both Terminals 4 and 5; access to public transportation via a new airport people mover; a large departure hall with natural light; a revamped ticket and check-in area intended to streamline the security screening process; 16 state-of-the-art security lanes; and more dining and retail. Terminal work will also include updated facilities for the airline's 7,300 employees at LAX.
- Construction is expected to create 6,000 jobs, with more than 30% of the labor force comprised of local workers and 20% of contracts set aside for minority- and woman-owned businesses. Passenger and public areas are expected to be complete in time for the 2028 Summer Olympic Games in Los Angeles.
Dive Insight:
As airports age and more people travel by air, airlines and airport owners are trying to meet capacity and provide passengers with a fresh, modern experience as well.
The Federal Aviation Administration helps fund construction related to airport infrastructure — runways, taxiways, lighting and repairs — and has spent more than $3 billion a year for the last several years on such projects ranging from a few thousand dollars to tens of millions per grant. Federal lawmakers recently reauthorized the Federal Aviation Administration Act of 2018, which kept grant funding at about the same levels as the previous rendition but added an extra $1 billion in discretionary airport infrastructure grants.
However, when it comes to huge terminal renovations or new construction, airlines and the airport owner are typically left to come up with non-FAA money in order to pay for it. New York Gov. Andrew Cuomo is spearheading a $13 billion renovation of John F. Kennedy International Airport in New York City and plans on using $12 billion of private money, perhaps through a public-private partnership; $1 billion from the Port Authority of New York and New Jersey; $3 billion from JetBlue for its own terminal; $7.9 billion from other airlines for their own terminal; and $2 billion from other sources.
