More subsidies for Qatar & an outrageous bonus

More subsidies for Qatar & an outrageous bonus

If at first you don’t succeed, subsidize, subsidize again.

Surely that is the motto of the Allegheny County Airport Authority now that it is throwing more public dollars at Qatar Airways’ cargo service at Pittsburgh International Airport.

The phrase “economic perversion” also comes to mind. As does this thought: These people are shameless.

You may recall that the authority initially inked a contract with the cargo carrier in 2017 that, incredibly, incentivized it to fail. That is, the authority ended up paying Qatar Airways nearly $1.49 million for failing – and failing miserably, at that — to meet its cargo goals.

Oh, and do remember that the Airport Authority initially tried to hide the deal from the public.

Now comes word that the authority and Qatar have signed a new one-year deal, retroactive to October 2018, with an “incentive” cap of $780,000.

As the Post-Gazette reports it:

“And in a flip of the script, under the new deal with the (authority), Qatar qualifies for more incentives if it brings in more cargo. Subsidies will be lower or won’t be awarded at all the less cargo the carrier flies into and out of Pittsburgh.”

That’s followed by a quote from Airport Authority CEO Christina Cassotis:

“It just seemed to make more sense this way.”

No, it does not; this kind of corporate wealthfare does not make sense in any way.

So, the public is supposed to feel better about this latest chapter in the authority’s book of economic perversions? Why should Qatar Airways – why should any airline – be “incentivized” with public dollars to fail, to succeed or for anything?

The authority is rationalizing this latest intervention to cover up the lie of the last intervention by noting Qatar has a slick new deal to transport cargo for EFL, a Shri Lanka-based freight forwarder, that makes “the Pittsburgh airport a distribution point as part of the nonstop Qatar flight,” the P-G reported.

It further rationalizes the latest public subsidies by claiming the Qatar flights have provided $42.8 million in annual economic output for the region.

But if the authority’s Qatar analysis is anything like the one it did to defend millions of dollars in public subsidies to British Airways, the figure is dubious.

Back to Cassotis, shilling for Qatar:

“When you’re taking a risk on a brand-new market, you got to know that you’ve got a partner that has skin in the game.”

That’s ludicrous; public dollars should not be treated as venture capital. And neither should they be used by government to cut deals that incentivize failure or pay capital costs that a private business alone should bear.

Constantly skinning taxpayers and skimming from other public money coffers for such purposes is not sound public policy.

And you simply have to love the chutzpah of Peter R. Penseel, Qatar’s senior vice president of cargo sales and network planning:

“We are not here to collect (public) money.”

Then why collect it? Why won’t Qatar risk 100 percent of its own capital in pursuit of profit? Because the Airport Authority keeps rolling out on the tarmac that trough filled with free money.

Oh, and this just in: The Airport Authority board has awarded Cassotis a $154,800 performance bonus for 2018. That’s on top of her $365,000 salary.

Such a reward for the recidivist prosecution of such unsound public policy is outrageous.

Point of order:

A local radio talk show host, arguing for the necessity of a $15 dollar an hour minimum wage, lamented that the wage floor has been static at $7.25 an hour for the last decade.

The more than implied message was that, given how the cost of everything has increased so much since 2009, nobody can really live off the existing minimum wage.

So, how much has inflation eaten away at that $7.25 base? Not much.

The rate of inflation over the past decade has been about 1.8 percent. Thus, it would take $8.66 today to have the same purchasing power today as that $7.25 had in 2009.

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