Cathay Pacific is poised to buy naming rights to the new LAX Metro station in a five-year deal worth nearly $10 million. This will create the Cathay Pacific / LAX Metro Transit Center in a deal set to be approved by the Metro Executive Management Committee on May 21.
The Hong Kong-based carrier, 30% owned by Chinese state carrier Air China, will get full station branding, map and announcement changes, and 13 train wraps.
The LAX/Metro Transit Center opened last June. It’s the rail and bus gateway to LAX, connecting the airport to regional trains. But the actual connection to the terminal is still buses, not the billion dollars over budget and years-late Skylink people mover. Currently, the bus to the terminals runs about every 10 minutes, from 4 a.m. to 1 a.m.
Eventually, the automated people mover will run 2.25 miles across six stations (3 inside the central terminal area and three outside of it) with trains every 2 minutes at peak and 10 minutes end-to-end.
It began passenger-free testing last month. The system must complete 30 days of uninterrupted operation without significant issues before passengers can ride. It was supposed to open in 2023.
Taking the train to the Cathay Pacific station to fly Delta, Southwest and other airlines out of LAX is certainly interesting. I don’t know whether it’s worth $1.7 million a year to Cathay Pacific for their 3 daily flight. It seems like a U.S. domestic airline could better leverage that cost across its more dominant position at the airport.
At the same time, it’s likely that passengers using the station will tend to skew lower income than airline passengers overall.
72% of LAX Metro riders as a whole (not station-specific to LAX) have household incomes under $50,000. It’s likely that LAX passengers are higher-income than that, but lower income than those arriving via other means. That may make the payback to the station sponsor harder, and suggest that Cathay Pacific is willing to pay a 70% premium over what metro points out that BetMGM pays to brand New Jersey Transit’s Meadownlands Rail Line.
(HT: @PointsToPointB)
I always wonder if these naming rights deal are really worth it. Am I more likely to use Staples if I attend a basketball game at the Staples Arena? Can’t imagine that is the case, but I’ve been out of the “desired” demographic for years. [This is a hypothetical example, as I hate basketball.]
Whomp whomp, Gary. As an lifelong Angeleno, I don’t give a flying fig if you think the investment is “worth it” for Cathay Pacific. What I do care about is our city finances. The $10M name rights deal isn’t a whole lot of money these days, but every dollar helps–especially since this project went way over budget.
Let’s not forget the Olympics are coming to Los Angeles. It may be worth it to them for name recognition with international visitors.