Monday, February 11, 2008
Airport Fees Reduced, Should Be Even Lower
Here’s the story on passenger traffic at Pittsburgh International Airport: overall, it is down 19 percent from 2006 through the end of 2007. There are airlines that posted gains in traffic, most notably Southwest and AirTran, but the decrease in operations of US Airways continues to be felt.
It sounds like the Airport Authority has accepted PIT’s transition to a regional airport with good competition from where it once stood as a US Airways hub. The Authority’s director noted that that the airport wants to attract customers “by offering more airline choices and lower, competitive fares”.
A big part of competition and cost at the airport is the fees that airlines have to pay to operate at the facility. There are terminal fees, ramp fees, landing fees and others that generate revenue that cover the airport’s costs. In early 2008, these fees were boosted as US Airways downsized. Now the Authority has taken steps to refinance debt and, as a result of saving $10 million on the refinancing, will pass the savings onto airlines in the way of fee reductions.
Even with the cuts, the terminal fee and the landing fee will still be higher than they were before the increase. The low-cost airlines expressed thanks but continue to hope that they will go lower.
And even though the Authority seems exuberant that they were able to sharpen their pencils and refinance debt, they should have been more forceful over getting the $19.9 million from gaming money that was supposed to go for airport debt but ended up in the County’s hands, despite claims to the contrary that the plan all along was for the County to get first call on the money for airport debt it had. We have detailed the whole story in a previous Policy Brief (Volume 8, Number 4) and now the first installment for the Authority will be in 2010, presumably since the County is going to take another chunk in 2009. Hopefully competition and choice at the airport can hang in there while the County gets its act together.
It sounds like the Airport Authority has accepted PIT’s transition to a regional airport with good competition from where it once stood as a US Airways hub. The Authority’s director noted that that the airport wants to attract customers “by offering more airline choices and lower, competitive fares”.
A big part of competition and cost at the airport is the fees that airlines have to pay to operate at the facility. There are terminal fees, ramp fees, landing fees and others that generate revenue that cover the airport’s costs. In early 2008, these fees were boosted as US Airways downsized. Now the Authority has taken steps to refinance debt and, as a result of saving $10 million on the refinancing, will pass the savings onto airlines in the way of fee reductions.
Even with the cuts, the terminal fee and the landing fee will still be higher than they were before the increase. The low-cost airlines expressed thanks but continue to hope that they will go lower.
And even though the Authority seems exuberant that they were able to sharpen their pencils and refinance debt, they should have been more forceful over getting the $19.9 million from gaming money that was supposed to go for airport debt but ended up in the County’s hands, despite claims to the contrary that the plan all along was for the County to get first call on the money for airport debt it had. We have detailed the whole story in a previous Policy Brief (Volume 8, Number 4) and now the first installment for the Authority will be in 2010, presumably since the County is going to take another chunk in 2009. Hopefully competition and choice at the airport can hang in there while the County gets its act together.
