The January 2027 debut of Los Angeles International Airport’s long-delayed automated train system is again in peril as “multiple technical challenges” now threaten the finances of the $3.3 billion project, .
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The Oct. 8 report notes that target testing and certification for the Automated People Mover ahead of passenger use on Jan. 6 is “at risk of further slippage.” Further delays could mean a possible default on bonds needed to pay for remaining work.
The challenges highlighted in the report — prepared by the . for lenders and Fitch Ratings — include litigation filed by the People Mover’s contractor in a dispute over $800 million for work associated with the solar system that will power the train.
, filed in July in the Superior Court of California in Los Angeles, stands to delay the train’s startup until claims are resolved and a solar power agreement with the city is signed.
Los Angeles World Airports, the city agency that oversees LAX and the Van Nuys Airport, is not commenting on the litigation.
The contractor, called the LAX Integrated Express Solutions or LINXS, is a private-public partnership formed in 2018 to build the airport’s 2.25-mile train service, which is also known as SkyLink. In September, LINXS said it wouldn’t make its Oct. 6 startup deadline.
When complete, the fully electric transportation system will connect six stations across the airport and the Metro rail system, bringing all rental-car companies together at a single off-site facility. SkyLink expects to eventually remove up to 3,200 shuttle trips from the central terminal area every day.
The LINXS team consists of Texas-based Fluor, London-based Balfour Beatty, Florida-based ACS Infrastucture Development, and the German firm Hochtief PPP Solutions.
A fifth equity member is Quebec-based Bombardier Transportation — bought by France’s Alstom in 2021 — which is providing the operating system for the People Mover. Alstom also provides maintenance work for Metrolink in Southern California. The region’s train service has been making service cuts due to budget funding shortfalls.
last year faulted the contractor for the People Mover issues. LINXS lawyers and officials could not be reached for comment.
Blast damage
Other problems identified in the October report include expansion joints on the structural path of the elevated train that accommodate movement from temperature changes, seismic activity and “normal structural behavior.”
Damage to the power rail and guide beam for the train system during a late September ramp-up ahead of testing also is stalling the train’s progress. “Blast incidents” occurred at three locations on the guideway, the report states. The cause is unknown and investigations are ongoing.
“The power rail and guide beam were damaged. The guide beam has been repaired, but power rail reassembly is ongoing with no confirmed timeline,” the report states.
Layoffs rescinded
The stumbles in testing are creating ripple effects elsewhere at the airport.
A parking lot contractor at LAX also told the Southern California News Group on Wednesday, Oct. 14, that it is rescinding a notice to layoff 247 workers at the end of October due to a further delay in the startup date for the airport’s train service.
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The parking lot contractor that filed a notice with the state’s Employment Development Department to layoff 247 workers at LAX parking facilities at the end of October is preparing to withdraw those plans because of the People Mover delays.
“The WARN letter is being rescinded due to changes in project timelines,” said a spokeswoman with LAZ Parking, which has workers scattered across the airport who stand to lose their jobs when the people mover goes into operation. “This will give LAZ the opportunity to reposition more employees. Layoffs will not happen this month.”
The EDD filing in August was made as part of the federal Worker Adjustment and Retraining Notification Act — commonly referred to as WARN, which are required when an employer lays off more than 50 employees.
January 6 start?
The train service is now set for operation by Jan. 6, according to with the Electronic Municipal Market Access website, a repository for municipal securities disclosures. During the 83 days left before startup happens, the train must go through 30 consecutive days of testing, and receive an independent overview and an assessment by LAWA.
If all goes smoothly, LINXS said in the filing that the People Mover can begin operation.
Separately, bondholders for the project recently agreed to consolidate an Oct. 8 deadline for bond payments to Dec. 8, and if LINXS fails to adhere to it, LAWA could replace the contractor. LINXS said in its filing that they believe the additional time would be granted beyond the December deadline to work on the project if claims with LAWA are resolved.
In July, Fitch Ratings downgraded the California Municipal Finance Authority’s $1.2 billion in bonds for the People Mover project to default territory. Fitch dropped the bond ratings to BB from BB+ with the bonds placed on a negative watch list.
Fitch wrote the downgrade reflects heightened risks due to multiple delays and “rising discord between the project parties over outstanding claims and oblgiations, even though the project is 99.6% complete and both parties have economic incentives to complete it.”
Shannon McCue, director of global infrastructure and project finance of Fitch, told the Southern California News Group in an interview on Oct. 9 that the downgrade highlighted the project’s vulnerability to default but that the new deadline would give it more time to test out the system in time for the new year opening.
“That was important because that could have been a technical default, so they avoided that,” McCue said. “But now they have to (meet the new deadline) by December 8 in order for them to be operational in January of 2027.”
LINXS is no longer nearing an initial breach of contract, she said.
“There’s a window of time between now and December 8 to try to meet the requirement of getting all that testing done, getting it certified and ready to be signed off on, which is required for the system to start accepting passengers,” she said.
‘Finish the damn job’
, L.A. Councilwoman Monica Rodriguez requested that LAWA officials report on the “current delays and cost overruns” on the People Mover — which they still haven’t done.
“They need to finish the damn job,” an irate Rodriguez said in an interview with SCNG about LINXS. “The fact that they still cannot complete a straight 30-day trial of operations without any errors is not a reflection of issues with the city. It’s them. Very simply, what are they not doing, or how is their system that they built unable to maintain a 30-day test period without any errors. It’s very simple.”
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