BOARD OF AIRPORT COMMISSIONERS UNANIMOUSLY APPROVES HISTORIC BUDGET FOR LOS ANGELES WORLD AIRPORTS

$1B Budget Invests In Continued Modernization, Workforce and Ensuring Ongoing Financial Stability

(Los Angeles, CA) On Thursday, June 1, the Board of Airport Commissioners (BOAC) unanimously approved a budget for Los Angeles World Airports (LAWA) in the amount of $1.076 billion for Fiscal Year 2023-24. This is the largest budget ever approved by BOAC. The expense budget is matched against projected revenues of approximately $2.005 billion for the same period, resulting in projected net revenues of $928 million before adjustment for capitalized labor. These net revenues are available to pay debt service, fund reserves and fund capital projects. LAWA’s budget expenditures support the daily operations, as well as provide capacity to fulfill federal mandates for the safety and security of airport operations. LAWA is a proprietary department of the City of Los Angeles, which means that it receives no taxpayer funds for its operations.

“We are proud to have approved a historic budget for Los Angeles World Airports, which invests in the continued modernization of our airports, building and retaining our workforce and realizing our long-term strategic goals for safety and security, guest experience and sustainability,” said Beatrice Hsu, President, BOAC. “Most importantly, the approved Fiscal Year 2023-2024 budget ensures the ongoing financial stability of our airports as we come out of the shadow of the COVID-19 pandemic and look towards the opening of major facilities and projects, including the Automated People Mover train and Consolidated Rent-A-Car facility.”

The proposed Fiscal Year 2023-24 Budget is based on a conservative forecast of operating revenues and operating expenses that reflect management's expectation of LAX passenger traffic of 41.5 million enplanements, approximately 9% higher than the budgeted Fiscal Year 2022-23 level of 38 million, and approximately 6% lower than the actual Fiscal Year 2018-2019 level. The proposed budget allows LAWA to achieve targeted key financial metrics and meet all LAX Bond Indenture covenants.

The largest portion of LAWA's operating expenses consists of payment of salaries, fringe benefits, and other payroll expenses for LAWA employees and City employees providing services to LAWA. Personnel costs represent $618.2 million or 57% of LAWA's total operating expense budget. Payments for salaries and benefits for those employees directly employed by LAWA during Fiscal Year 2023-24 are budgeted at $537.5 million, which is an 8% increase from the Fiscal Year 2022-23 Adopted Budget. The proposed budget assumes a headcount of approximately 3,662 positions, which include full-time and part-time positions. This is higher by 78 positions compared with the Fiscal Year 2022-23 Adopted Budget of 3,584 positions, and significantly higher than the 2,930 current employees on payroll, mainly due to the need for additional operations, maintenance, security and administrative staff to support increased passenger activity at the airport. This is equivalent to the number of employees LAWA had before the COVID-19 pandemic.

“At LAWA, we have the best employees in the world, and our Board approved budget invests in our people through the approval of positions equivalent to pre-pandemic numbers, including increases in budget positions for our security and police officers, maintenance staff and operations teams,” said Justin Erbacci, Chief Executive Officer, LAWA. “I’m grateful for our LAWA employees’ continued dedication to ensuring world class airports, and to our Board for its continued support and approval of this thoughtful budget.”

The adopted Fiscal Year 2023-24 Annual Budget for Los Angeles World Airports can be found here: MetaViewer.php (granicus.com).