LAX officials report passenger and cargo declines; committee approves $31 million increase to central terminal-area improvement contract

Los Angeles airport officials told the Commerce, Tourism and Travel Committee that passenger and cargo volumes are below competitive peers and pre-pandemic levels, and that federal trade uncertainty and rising local labor costs are already pressuring airlines, concessionaires and airport-area businesses. The committee approved a contract amendment to fund improvements to the central terminal arrival area.

The airport representative said passenger travel at Terminal 1 is down about 30 percent and that early-year cargo volumes were down roughly 7 percent; the airport overall remains behind pre-pandemic figures by roughly a dozen percentage points, with a broader 20–30 point gap compared with some competing airports. Officials described weaker discretionary travel, sensitivity of cruise and tourism business (booked many months in advance) and the risk that concessionaires and airline partners will reduce investment or exit if local costs and regulatory burdens rise.

Committee members and airport staff discussed instances of concessionaires signaling concern about local policy and labor cost pressures. Staff described one large international concessionaire’s contractual clause that would allow it to exit its agreement under specified business conditions, and said some small concession operators are already struggling to remain viable. The airport representative said the agency is exploring procurement and staffing reforms to improve agility and encouraged the council to consider reducing regulatory friction that staff said delays hiring and contracting.

Separately, the committee considered a board resolution and contract amendment for the Central Terminal Area arrival improvements. The report presented a second amendment to contract DA50GX20 with Hanself Leps Construction Company adding approximately $31,000,000 to the contract for design and construction elements including sidewalks, lighting, façade and arrival-area finishes. City staff described the work as aimed at improving passenger arrival experience; visuals and renderings were requested by members.

The committee approved the contract amendment (agenda item 5) by a recorded vote of 2 in favor, 0 opposed, 1 absent. The airport representative said the agency will present visual materials and more detail on phasing and parking impacts at a future meeting.