LA sued for breach of contract

OFFICIALS have reached a settlement over a breach-of-contract lawsuit to develop air cargo traffic at California’s Ontario International Airport (US).

Los Angeles World Airports (LAWA) agreed to pay developers Aero Ontario US$1.66 million in the settlement.

According to Aero Ontario, LAWA awarded it the contract to develop an international cargo centre at the regional airport in June 2003. In return, LAWA would move more cargo traffic from Los Angeles International Airport (LAX) (right) to Ontario, turning it into a “secondary cargo gateway” to LAX.

However, by 2009, LAWA had still not migrated any cargo to Ontario claiming that it no longer made economic sense to do so.

The Pacific Gateway Cargo Center was originally due to be finished by the start of 2010. It would have had 93,000 square metres of space and 16 aircraft places. While Aero Ontario has not built the centre, it claims to have spent $5 million on pre-construction studies.

In the lawsuit, Aero Ontario said LAWA had “undermined and circumvented Aero Ontario’s efforts to place cargo tenants at [Ontario] by itself, placing tenants at LAX or other LAWA-controlled airport properties without making any attempt to market the project”.

Freight volumes at Ontario have fallen 35.2 per cent since 2004, while LAX’s are down 8.9 per cent in the same period.

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