Frankly, there is something nauseating about the Allegheny County Airport Authority’s move to not only grant its CEO a handsome contract extension but to also pay out a six-figure bonus.
The board voted unanimously on Jan. 15 to extend the contract of Christina Cassotis until Dec. 31, 2025. According to the Post-Gazette, it cited “leadership in bringing more flights to Pittsburgh International Airport (PIT) and in helping to navigate through a pandemic that has devastated airlines and the travel industry as a whole.”
The board also cited Cassotis’ work to shepherd through the ever more dubious PIT terminal reconfiguration project, among other things.
Cassotis was paid $387,000 in 2020. Her new contract calls for a 6 percent increase in each of the next four years. While that’s a cumulative percentage point increase of an astounding 24 percent, the actual percentage increase, of course – each year’s subsequent percentage increase calculated on top of the prior year’s increased pay – is far higher.
Cassotis’ base salary for 2021 will be $410,220.
But wait, there’s more eye-popping news.
The authority board also authorized the payment of a $164,250 bonus for Cassotis’ work in 2019. She was paid a $146,000 bonus for 2018. No bonus was paid for 2020; the board cited the pandemic.
Nonetheless, Frank Gamrat, executive director of the Allegheny Institute for Public Policy, calls the pay increase and bonus payment “out of touch.”
“At a time when most companies are freezing pay increases or laying people off, the Airport Authority chooses to not only give an extension, but a bonus as well.” That it was for a prior year makes no difference.
As noted Monday in this column, Airport Authority budget data crunched by Jake Haulk, the think tank’s president-emeritus, found aircraft operations at PIT are down 37.5 percent for the year ended Nov. 30 and 41 percent in November 2020 over November 2019.
The domestic passenger count remains 65 percent below year-ago levels. International passengers? None since March.
And the coronavirus pandemic clearly gets the blame.
So, are those any kind of reasons for a public authority to dole out such generous payouts? No, they are not.
Now, one might further rationalize that, well, at least the board did not pay a 2020 bonus. But that $164,250 bonus for 2019 warrants a third-party review and/or a board head examination.
For that was the year that British Airways began to once again fly out of PIT to London. In a deal Cassotis cut in 2018, it included $3 million in public subsidies over two years, subsidies that Delta Air Lines said led it to scrub its flights between PIT and Paris.
Simply put, Delta could not compete with the subsidies (subsidies that it, too, enjoyed in the past).
And, lest we forgot, Haulk (in Policy Brief Vol. 19, No. 36), noted that in August 2019, “the international passenger count fell an astonishing 37.3 percent compared to the same month in 2018 despite the heavily touted arrival of British Airways (BA) in April.”
Furthermore, data released for 2018 by the U.S. Department of Transportation – covering domestic passengers, flights and load factors – showed Pittsburgh International kept pace with neither all airports nor those comparable to it.
And yet Cassotis was paid a $146,000 bonus for that year?
Guess what else happened in that big 2018 bonus year?
The very expensive subsidized failures of the Qatar Airways cargo deal (incentivizing failure), the OneJet debacle (by a financially conflicted Airport Authority board that failed, horribly, to do its due diligence) and the mess that was WOW Air (another dubious case of due diligence).
All raised serious questions about Cassotis’ business judgment and her board-granted plenary power to grant subsidies to airlines in any amount.
Yet Cassotis not only won that 2018 six-figure bonus, her contract was extended at a premium then.
“Perhaps the Airport Authority will learn a valuable lesson from 2018’s embarrassing failures and all the money that it has wasted,” Gamrat said at the time (in Policy Brief Vol. 18, No. 44).
Obviously, the authority board – in a slap to fiscal prudence, common sense and reality — did not.
And the bottom line is that had the board not given Cassotis any pay increase for 2021 or any bonus for 2019, it would have been too much, given what was going on in the air and on the ground at PIT.
Or what wasn’t.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
