Government Air & government as grocer

Government Air & government as grocer

“New year, new airline,” is the way Allegheny County Airport Authority CEO Christina Cassotis touted the arrival of Via Airlines to Pittsburgh International Airport’s flight mix.

But reasonable people are forced to ask this question: “Same-old, same-old?” If not this one: “Thank you, sir, may I have another?!”

They certainly are apropos queries, considering the authority’s long list of failures in attempting to command the marketplace with public subsidies. Think OneJet. Think WOW. Think Qatar.

And think of the boilerplate bromides trotted out yet again to announce the coming spring arrival of Via, a small Florida carrier that will offer exclusive flights to Austin, Texas, Birmingham, Ala., Hartford, Conn., and Memphis.

There’s talk from Via of making Pittsburgh a “focus city.” There’s talk of adding more flights. We’ve heard it all before.

“We’re happy. We’re thrilled,” Cassotis said. “They’ve got the right-sized aircraft.  These are the kinds of markets that the serve and we know these markets will perform when they get service.”

Past being prologue, until they don’t, of course.

“It’s a perfect match,” said Rich Fitzgerald, the Allegheny County chief executive. Until it’s not, that is.

Public subsidies? Why, of course, yes. They are said to not be anywhere near the ridiculous $3 million or so given to the now belly-flopped OneJet. But there are subsidies, still being negotiated and other than a “traditional” one-year waiver of landing fees.

Cassotis describes them as marketing incentives of a “modest amount.” The public won’t know that amount until the deal is cut. But if public officials and Via are so confident that there will be demand for these flights, why should public dollars be needed to market those flights?

Via, by the way, is defended as being “established” and not the kind of “start-up” that was OneJet.

But, and yet again, what kind of due diligence was performed to vet Via’s financials. If it was the same process use to vet OneJet and WOW, public dollars could be taken for another ride.

All that said, the Post-Gazette reports Via doesn’t have the best service track record. Flight delays. Unscheduled stops. Canceled flights. As the P-G’s Mark Belko reports:

“Such complaints prompted the U.S. Department of Transportation to write to Via last year to express ‘serious concerns’ about them. Via at the time was receiving a federal subsidy as part of the Essential Air Service Program to ensure flights to smaller airports.”

That’s the taxpayer-subsidized program to put commuter planes at airports where there’s insufficient market demand. What could go wrong, right?

The P-G says Via’s service problems were so severe that two airports asked the feds to replace Via with another carrier. Can it get any more encouraging?

There’s another object lesson in the folly and failure of command economics unfolding in Pittsburgh’s Hill District.

Five years and three months after its October 2013 opening, the heavily subsidized (through public and foundation dollars) Shop ‘n’ Save grocery store appears to be struggling.

That word comes in ancillary news reports about struggles of Hill House Association, the nonprofit group that owns the shopping center in which the full-service grocery is located.

As the Post-Gazette reports it, citing court documents, Shop ‘n’ Save stopped paying rent in the spring of 2018 while another business, a coffee shop, hasn’t paid rent since July 2017, not long after opening.

Exactly what’s going on is unclear. Is the landlord not maintaining the property? Can Shop ‘n’ Save not afford to pay its rent? The coffee shop owner told the newspaper that the shopping center has not generated the customer traffic that either business expected when they signed on to the development. The shop owner alleges Hill House has not sufficiently marketed the complex.

Of course, more than a decade ago when do-gooders were clamoring for a full-service grocery store at the site, the public pretty much was told that if it was built, Hill District residents, without a full-service grocer for decades and stranded in a “food desert,” would flock to the store.

You’ll recall how that claim was, in an illogical twist, the rationale for millions of dollars in subsidies that far outpaced the private investment of the grocer itself.

Well, if it was such a simple matter as building it and shoppers would come, why did this grocery stores require such massive subsidies? You’ll also recall that proposals to build a smaller store with less-expansive offerings that studies suggested would better serve the Hill District were repeatedly rebuffed.

These days, even the foundation community has pulled back from supporting Hill House, obviously seeing little or no promise of sustainability.

Where governments attempt to create markets, governments typically fail. And what appears to be a foundering attempt at “government as grocer” is the latest manifestation of that public policy truism.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).