LOS ANGELES WORLD AIRPORTS POSTS STRONG FINANCIAL RESULTS FOR FISCAL YEAR 2005
(Los Angeles, California – January 23, 2006) Los Angeles World Airports (LAWA) today released audited financial results for fiscal year 2005 (12 months ending June 30, 2005).
LAWA’s total net assets were approximately $2.5 billion as of June 30, 2005, an increase of $138.9 million, or 5.9%, over June 30, 2004. Net assets, the amount by which LAWA’s total assets (which include its buildings, land equipment, cash investments and all receivables) exceed its total liabilities, serve as the key indictor of LAWA’s strong financial position.
LAWA is a self-sustaining department of the City of Los Angeles and owns and operates four airports – Los Angeles International (LAX), Ontario International (ONT) Van Nuys (VNY) and Palmdale Regional (PMD). LAWA receives no financial assistance from the City’s General Fund.
In FY 2005, total passengers at LAWA airports increased by approximately 5.4% to 63.8 million. Increased passenger volumes positively impacted LAWA’s financial performance. LAWA’s operating revenues increased more than 5% over FY 2004 to $574 million, fueled by increases in concessions revenues. More passenger activity contributed to this increase in retail spending in virtually every category, particularly duty free sales (up 58.2%) and auto parking (up 12.1%). Revenues from rental cars, luggage carts and food and beverage establishments also increased.
Operating expenses grew 8.5% to $499 million largely due to increases in personnel and contractual services costs. Salaries grew as a result of a 7.3% increase in the number of full- time-equivalent staff. In addition, contributions to employee retirement and health subsidy plans increased. The nearly 10% growth in contractual services expense is attributable to increased security costs, including the costs of policing and surveillance equipment.
"I am pleased that Los Angeles World Airports has been able to grow total net assets in the face of significantly higher security costs and airline industry financial difficulties," said Alan Rothenberg, president of the Los Angeles Board of Airport Commissioners. "This places us in an enviable financial position among major airport operators around the world to fund value-added infrastructure improvements and other initiatives to improve customer satisfaction."
LAWA Executive Director Lydia Kennard said, "With every year that passes, the challenge of operating a major airport authority grows exponentially. We are in a challenging business. Last year we saw additional airlines seek bankruptcy protection, and several smaller airlines ceased operations altogether. Our net assets of $2.5 billion are the truest indicator of our financial strength. This kind of performance shows we can run our business in financially difficult times in a prudent manner which benefits all of our stakeholders."
