The PIT terminal deal

The PIT terminal deal

In a long-awaited move, airlines serving Pittsburgh International Airport (PIT) have agreed to financial terms for the much ballyhooed $1.4 billion new terminal project.

But many questions remain.

The agreement allows the Allegheny County Airport Authority to float revenue bonds required to pay for the project. It includes the construction of a new landside terminal that backers say will streamline and enhance ticketing, security and baggage claim.

Whether the terminal is needed or not remains a matter of great debate. As does the authority’s repeated claim that no local taxpayer dollars will be used.

Indeed, the airlines will pay their share of the new terminal costs through landing and other associated fees. But the simple fact of the matter is that there are oodles and boodles of public dollars in this project – and probably more than usual because of all the pandemic-relief dollars that have been flowing to airports nationwide.

That said, (and as Frank Gamrat, executive director of the Allegheny Institute, recently noted in an interview with KDKA Radio’s Chris Moore), there’s plenty of speculation that the presence of so much federal money made it more palatable to move forward with the deal.

And a valid question is if, propped up by all those federal dollars (remember, money is fungible), that $1.4 billion price tag will balloon again. Of course, it will.

Remember, the project’s cost estimate began at $1.1 billion. After all, there’s nothing quite like “free federal money” to give cover for rising costs.

Another question (as posed by think tank president-emeritus Jake Haulk) involves the seven-year term of the agreement with the airlines.

“How is seven years enough to convince bond buyers this is a good deal?” he asks. Such bonds typically have 20-year terms or longer.

Additionally, Haulk says “one can only hazard a guess at what the airlines are getting for signing on to this deal.”

That is, what kinds of goodies in the form of subsidies, a past and largely failed practice of the Airport Authority, have been delivered on a silver platter?

But, given that history, Haulk also wonders if the airlines will demand there be no subsidies for airlines on competitive routes.

As but one example, that very practice — $3 million in subsidies to British Airways over two years — is said to have directly led to Delta Air Lines pulling its direct flights a few years ago between Pittsburgh and Paris.

But the public may never know if or how high the platter was stacked.  That’s because terms of the seven-year agreement with the airlines have not been released.

And no matter what rationale/excuse the Airport Authority employs in attempting to defend such secrecy, that’s simply wrong.

A public authority expending public dollars at a public airport has a sacred responsibility to make all the details available to the public. And now. Not later. And certainly not never.

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