As we are wont to say when it comes to the Allegheny County Airport Authority, the truth is the first casualty of public relations. In this case, it’s lying by omission.
Nowhere to be found in the authority’s glowing 22-paragraph announcement that Icelandair will begin seasonal (May-through-October) nonstop service between Pittsburgh International Airport (PIT) and Iceland is this little detail:
The Post-Gazette reports that Icelandair will be receiving a $350,000 subsidy from the Airport Authority. Given the agency is a public authority, indeed it is a public subsidy. In addition, the authority will waive landing fees for two years, said to be standard practice.
But there are more than a few curious issues surrounding the Airport Authority’s latest bribe-to-serve deal.
Such as Grimur Gislason, Icelandair’s North America director, telling the P-G that the subsidy was “not a deal breaker” for the airline and that he foresees plenty of demand for the flights.
So, why did the Airport Authority throw $350,000 at Icelandair?
Equally curious (and no less scurrilous) is how the Airport Authority’s official news release treats history. Get a load of this characterization:
“PIT previously offered nonstop service to Iceland via start-up WOW Air, which operated from June 2017 to January 2019. The strong passenger response to that route, primarily leisure travelers, contributed to Icelandair’s decision to move into the market.”
Uhm, yoooo-hooooo: WOW received an $800,000 subsidy to fly into PIT. It went belly up. And the Airport Authority apparently is still trying to recover $187,500 of that subsidy.
It was another case of the authority failing to conduct a due diligence review of an airline it would subsidize.
Then there’s another in a long line of specious economic impact claims that the Airport Authority uses to defend subsidizing airlines. This time, it says the Icelandair flights will generate about $9 million a year for the Pittsburgh region.
How? Release the study, please. And if past is prologue with Airport Authority studies such as the British Airways study that touted the benefits of that subsidy, the methodology and conclusion will be found to be faulty.
Icelandair says it would like to see the seasonal flights expand year-round. With even more subsidies, perhaps?
And what airline might be next for the PIT public subsidy train? Aer Lingus, the Irish carrier. Irish media already has reported that the Airport Authority has offered millions of dollars for direct Pittsburgh-to-Dublin flights.
Cleveland shelled out nearly $12 million for its Aer Lingus flights. A PIT official says talks are ongoing with Aer Lingus. Aren’t public dollars lucky.
“Nothing says failure like having to pay someone to provide a service to the public that should be paying,” says Jake Haulk, president-emeritus of the Allegheny Institute. He’s been picking apart government-sanctioned economic impact studies for decades.
Those proffering such schemes “cannot bring themselves to recognize they are in a no-growth economy,” the Ph.D. economist says.
“All this subsidization of air travel is being done to justify the outrageous spending on a new [nearly $1.6 billion PIT] terminal,” he adds.
All this said, it’s rotten-in-Denmark tragic that the Airport Authority, in its official news release regarding Icelandair, can neither be an honest communicator about the latest subsidies to be paid nor even acknowledge its past Iceland flight subsidy failure.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
