Los Angeles World Airports (LAWA) increased its total net assets by seven percent to $2.6 billion during the fiscal year 2006, which ended June 30th — an increase of $172.9 million over June 30th, 2005, according to financial results released Wednesday, January 3rd.
LAWA is the city agency that owns and operates Los Angeles International Airport and three other Southern California airports.
Net assets — the amount by which LAWA’s total assets, including its buildings, land, equipment, cash investments and all receivables, exceed its total liabilities — serve as the key indicator of LAWA’s strong financial position, airport officials said.
Los Angeles World Airports receives no financial assistance from the city’s General Fund.
In fiscal year 2006, the LAWA airports added approximately 300,000 passengers for a total count of 68.6 million — an increase of less than one percent over the prior fiscal year’s passenger count.
LAWA’s total operating revenues grew more than eight percent over fiscal year 2005 to $621 million.
Both landing fees and building rental rates, principally at LAX, were the major drivers of revenue growth, airport officials said. However, increases in concessions, notably auto parking and rental cars, contributed nearly $10 million to these favorable results, officials said.
Operating expenses grew nearly ten percent to $548 million, largely due to a four-percent increase in full-time-equivalent staffing, which in turn, fueled growth in salaries and retirement contributions, airport officials said.
Salaries grew by $17.8 million, or 9.5 percent, and retirement contributions by $18.8 million, or 71 percent. A ten-percent increase in contractual services expense occurred as a result of increased security services and expanded information technology needs, officials said.
“Los Angeles World Airports has posted another solid year of financial results, with net assets continuing to grow,” said Alan Rothenberg, president of the Los Angeles Board of Airport Commissioners.
“Despite relatively flat growth in passengers, our operating revenues increased, including virtually all categories of retail concessions.
“While we remain focused on cost containment, the challenges of running such a large, complex and important business as our airports require us to invest meaningfully in staff and technology.”
LAWA executive director Lydia Kennard said, “Fiscal year 2006 saw us invest $206 million into capital projects at our airports.
“We spent significant amounts on noise mitigation — one of our most important priorities — as well as improvements on the south runway at LAX and runway reconstruction at ONT (Ontario International).”