In the race to be the best non-functional transit system in California, the LAX Automated People Mover has taken a narrow lead over the California High-Speed Rail.
Both are non-functional, but the Automated People Mover has train cars. There are no people in them, so while it’s automated, it’s not a people mover. Therefore it remains eligible to compete in the non-functional race event.
The little train ride at the airport, just 2.25 miles long, has been named SkyLink. It’s all-electric, very climate-forward, and as a bonus it’s expected to reduce traffic. So far, it has only reduced its own bond rating.
On July 21, Fitch Ratings downgraded approximately $1.2 billion of bonds issued by the California Municipal Finance Authority on behalf of LAX Integrated Express Solutions, LLC, known as LINXS, from junk to junkier and placed the bonds on “Rating Watch Negative.” Fitch noted the “heightened risks” that could lead to a “technical event of default.”
Even though the project is described as “99.6% complete,” it’s so late that it might not be ready for passengers by the drop-dead date in the bond contract, giving lenders the opportunity to demand immediate repayment or extract other concessions. What’s called the “longstop” date is on or about October 8.
There’s a separate “longstop” date for the project itself, separate from the bond financing, of December 8. If the little train hasn’t achieved “Passenger Service Availability” (PSA) by then, Los Angeles World Airports (LAWA) will have leverage to extract concessions.
The contractor, LINXS, blames the city for the delays and filed a lawsuit in July with all the gory details. The Los Angeles Department of Water and Power is part of the problem. According to the lawsuit, a 2025 power outage delayed progress for more than four months, and the city refused to sign a necessary interconnection agreement with LADWP related to solar panels. Further, LAWA changed roadway and other drawings, allegedly so it could declare certain LINXS work “complete” and allow other contractors into the areas to work, which caused problems.
And, LINXS alleges, LAWA concealed the real causes of the problems in order to shift blame to the contractor.
According to Fitch Ratings, “the design build (DB) contractor members are experienced and have a strong history of successfully working together.”
Arguably, the city of Los Angeles and its airport enterprise entity have so gummed up this project that nobody could have built it. If ancient Rome had our city government, it would still be waiting for its first road.
In Los Angeles, a little train at the airport must have cars that are “fully electric, 98% recyclable and generate a portion of their own power through regenerative braking,” according to LAWA. And “the command center and maintenance facility [will] generate nearly half of its power from solar energy.”
So the city probably should have expedited that interconnection agreement with LADWP if it expected the trains to run on time.
And there were other demands from the city, such as “a historic investment in Los Angeles’ emerging businesses and workforce,” which meant local contracts and local workers that checked various political boxes, including “transitioning out of gang involvement.”
The original estimate of the construction cost was up to $2 billion. Current estimated cost: $3.3 billion and counting.
The Automated People Mover will be free to ride. Who pays for it?
Every month, LAWA makes “Availability Payments” to LINXS to cover the costs of design and construction, financing costs and the cost of operations and maintenance.
The money to pay for it comes from various charges on airlines, rental car companies and concessionaires. You’ll pay for it in the cost of everything related to flying in or out of LAX.
Watch your receipts for higher “passenger facility charges” and “customer facility charges.” Brace yourself for the cost of a turkey sandwich at an airport restaurant. Expect to pay more for parking than you paid for your first car.
In March, the Los Angeles Board of Airport Commissioners voted to raise the fees charged to ride-share companies for airport pick-up and drop-off by as much as 140%.
At least SkyLink will be good for business. At Burbank, Ontario, Long Beach and John Wayne.
Write Susan@SusanShelley.com and follow her on X @Susan_Shelley