Source: LAX
The Los Angeles Board of Airport Commissioners (BOAC) unanimously approved a new Airline Service Incentive Program for airlines seeking to offer new or returning service between Los Angeles International Airport (LAX) and select international markets.
The new program offers competitive financial and marketing assistance for airlines and underscores Los Angeles World Airports’ (LAWA) priority of opening service to new and underserved markets to help boost international service.
“LAX’s Airline Service Incentive Program will strengthen our position as the premier West Coast gateway to the world by providing an incentive for airlines to operate and thrive at one of the busiest airports in the world,” said Beatrice Hsu, President, BOAC. “This investment will pay dividends as we recruit new service to underserved and unserved international markets and more quickly bring back service we lost due to the COVID-19 pandemic.”
“As we come out of the COVID-19 pandemic, we believe our airline incentive program will help us regain our international passenger numbers more quickly, providing a boost to the local economy, creating new routes to key destinations and allowing us to serve even more travelers as the demand for air travel increases around the world,” said Justin Erbacci, Chief Executive Officer, LAWA. “We are creating the airport of the future through our $15 billion modernization which, in combination with this incentive program, will make us an even more attractive market for airlines.”
The incentive program, which will begin May 1 and remain in effect until May 1, 2024, is open to both new and current airlines at LAX. To qualify, an airline must offer new international passenger service that is nonstop to a destination that is either not currently served or that has been unserved from LAX for at least two years. The destination must be within a country, region or market identified as a priority by LAWA. In order to receive incentives, new routes must meet certain service requirements and begin within the program term.
The program incentivizes new routes by providing airlines with reduced landing fees through quarterly credits from LAWA. Landing fees can be reduced by 100% in the service’s first year and by 50% in its second year. Airlines offering new seasonal service, which is defined as offering flights for six consecutive months for two years in a row, can reduce landing fees by 50% each year for up to two years.
LAWA also will help new airlines promote their inaugural services at LAX. Airlines offering either regular or seasonal service can take advantage of either $50,000 in non-matched marketing funds in its first year, or receive up to a total of $200,000 in a combination of matching funds from LAWA. These additional benefits are designed to incentivize airlines to restart service at LAX first.
For airlines already serving LAX, LAWA has created a pool of up to $10 million in landing fee credits available for new service routes on a first-come,first-served basis, in addition to marketing assistance. Airlines can reduce landing fees by 25% for the first year of reinstated, continuous service. LAWA also will provide $50,000 to promote reinstated service at LAX and destination airports.
Current priority markets include many popular destinations in Asia, Europe and Latin America, inclusive of the Caribbean.
An airline will not qualify for incentives if it switches service from a currently served market to a new priority market. An airline serving LAX can qualify only if it continues to serve its current international destinations and adds service to a qualifying priority market. Service that is cancelled during the program term will disqualify airlines from receiving incentives.