Effects of Merger up in the Air

No, we’re not talking about a City-County merger: that idea has not surfaced since the 2008 Nordenberg report was unveiled and got a lukewarm response. Nor are we referring to the proposed idea of the County Executive to create a SEPTA 2.0 in southwestern Pennsylvania out of PAT and other regional carriers: when the Exec traveled to Harrisburg this week to talk mass transit, he just pleaded for more money for the Port Authority.

Instead the subject is a possible merger between US Airways and American Airlines, and what, if anything, it would mean for Pittsburgh International Airport. One analyst stated there could be a "moderate increase" in Pittsburgh’s business but conditioned that upon whether "landing fees can come down". Duplication of flight destinations or maintenance could mean less potential for positive effects. Another analyst bluntly stated "don’t believe for a second that it’s going to do anything to increase any kind of traffic out of Pittsburgh."

In 2001 US Airways had 12,000 employees in Allegheny County, representing about 2% of total employment and making it the fourth largest employer in the County. Ten years later it does not even appear in the County’s financials on its list of top ten principal employers. Passenger volume fell 33% through the decade while operating expenses rose 22%. On a per passenger basis, operating expenditures have climbed from $3.42 to $6.23. Fees dropped in the 2012 fiscal year but the airport’s "cost per enplanement" was still characterized as high when the fee reduction was announced.

What Is To Be Done With Pittsburgh International Airport?

The new terminal at Pittsburgh International Airport (PIT) was constructed in the early 1990s at the behest of US Airways to strengthen Pittsburgh’s status as the principal “hub” in the airline’s system.  Nearly twenty years later PIT sits grossly underutilized and still has about $450 million in outstanding debt from that construction.  US Airways, after two bankruptcies in the early 2000s, has all but abandoned the airport, dropping from more than 500 flights a day to fewer than 50 by late 2010.  Recently the County Executive has promised to make PIT his top priority in the last year of his term.  While the object is to increase utilization by increasing the number of flights at PIT, how does that happen and how can the airport and surrounding property begin to pay the dividends needed to justify the huge investment in the new terminal?

 

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