Pittsburgh International Airport (Philadelphia, Penn: utilities, taxi, corporate)

[dbr56]

Originally Posted by pman

It's taking 25 years to pay down the debt, and probably worth remembering that us air tried to get the airport to lower it's fees
Pittsburgh International Airport works to reduce costs to attract airlines post-consolidation | CAPA - Centre for Aviation

The expansion turned out to be an unmitigated disaster but the drag is finally dissipating in part due to casino funds and actual retirement of debt.

Maybe it was a disaster, but the expansion was entered into directly as a result of USair; PIT didn't build this to rob anyone.

To add to the stress on PIT, while there has been a lot of consolidation in the industry and many hubs have since closed, to my knowledge USAir is the only airline that walked away from legal obligations. It can be said that PIT should have negotiated with USAir, but nothing excuses USair's unilateral and frankly near devastating action. PIT's recovery in the face of all this is nothing short of remarkable.

[I_Like_Spam]

Originally Posted by dbr56

To add to the stress on PIT, while there has been a lot of consolidation in the industry and many hubs have since closed, to my knowledge USAir is the only airline that walked away from legal obligations. .

I don't think that is true at all. Being in bankruptcy by definition means that the party can't meet its legal obligations. During US Airways bankruptcy passion, they reneged on pilots pensions and orders for new jets as well, before finally selling out their business and going permanently out of business in 2005 with the sale to America West.


Other airlines that went belly up might not have reneged on a big airport lease, but they've all were excused from some of their legal obligations as part of the reorganization process.

[Moby Hick]

Originally Posted by pman

It's taking 25 years to pay down the debt, and probably worth remembering that us air tried to get the airport to lower it's fees

My point about the ten years was that there was ten years of paying down a hub-level debt without a hub. Paying for a hub with a hub-level of flights is easier.

[dbr56]

Originally Posted by I_Like_Spam

I don't think that is true at all. Being in bankruptcy by definition means that the party can't meet its legal obligations. During US Airways bankruptcy passion, they reneged on pilots pensions and orders for new jets as well, before finally selling out their business and going permanently out of business in 2005 with the sale to America West.


Other airlines that went belly up might not have reneged on a big airport lease, but they've all were excused from some of their legal obligations as part of the reorganization process.

Sorry. Meant (significant) debt to airports. Certainly many airlines have utilized bankruptcy to restructure and this by definition results in significant debt restructuring. My point is that, to my knowledge, USAirway is the only airline that has completely walked away leaving an airport in significant debt that was the result of the airline in question.

I don't think anyone will debate that PIT was rebuilt because of USAir, and not just rebuilt, but literally built at USAir's demands and at an exorbitant cost.

Has any airline walked away from similar obligations in bankruptcy? Has any airport been compromised as a result of bankruptcy anywhere to the extent of PIT?

The legal difference between USAir and PIT: "At issue in the litigation is a dispute between the Airport Authority and the airline over the value of the leases and operating agreement US Airways rejected at Pittsburgh International Airport before leaving bankruptcy.

Last week, the authority filed papers in U.S. Bankruptcy Court objecting to US Airways' decision to value the worth of its Pittsburgh International
Airport operating agreement at zero. The authority maintains that the value of the operating agreement the airline rejected shortly before it emerged
from bankruptcy in March is $1.4 billion."
http://www.californiaaviation.org/dc/dcboard.php

I'm not saying bankruptcy has not affected all aspect of the industry including airport authorities, I'm saying that, to my knowledge, no airport has ever been bilked in bankruptcy the way PIT was by USAir. Given the devastating impact of the bankruptcy I think PIT has done a remarkable job and is in fact now poised to become a very successful airport.

[dbr56]

Originally Posted by Moby Hick

My point about the ten years was that there was ten years of paying down a hub-level debt without a hub. Paying for a hub with a hub-level of flights is easier.

Yes, and while I'm going off a pretty shaky memory, I'm pretty sure that the USAir demands would impact all carriers, meaning USAir and PIT couldn't just redo their lease agreement without all parties being involved. Further, I'm pretty sure politicians were trying to work financial incentives with USAir.

USAir restructured to make it attractive to other airlines and PIT was flushed down the toilet. It stank so bad I never flew USAir or any of its successors (including American so far) again (although I guess I'll bury this issue since the USAir name was thankfully flushed down the toilet by American).

My apologizes if I've misrepresented any of these details regarding leases or incentives.

[krogerDisco]

The airport expansion was a reasonable gamble. It worked for about a decade and PIT was rated the best airport in the country. Southwest doesn't use the hub system but they seem to be showing increasing interest. Maybe they are doing a strategic expansion in anticipation of the landing fees dropping?

[pman]

Originally Posted by I_Like_Spam

I don't think that is true at all. Being in bankruptcy by definition means that the party can't meet its legal obligations. During US Airways bankruptcy passion, they reneged on pilots pensions and orders for new jets as well, before finally selling out their business and going permanently out of business in 2005 with the sale to America West.


Other airlines that went belly up might not have reneged on a big airport lease, but they've all were excused from some of their legal obligations as part of the reorganization process.

US Air never went out of business. The merger with America west saw them adopt America west management but the resulting Company was largely us air (the name that was retained). Probably worth noting that us airways restructuring worked. The company ended up shifting hub operations to Charlotte which is a much cheaper airport to operate out of. International operations shifted to philly which has more o and d traffic (about double) and made more geographic sense. They did seem to learn, when philly was pushing their airport expansion plan us air clearly said if the fees became too high they'd leave. It's just a fact of life, each airport has a price it can charge. Pit has a price that is higher than what it offers as a result of the gamble. Some say it was a reasonable gamble but others could point out that the writing had been on the wall already since deregulation. What changed was bush stopped bailing them out which forced all the legacy carriers to restructure over the ensuing decade

[krogerDisco]

Originally Posted by pman

Some say it was a reasonable gamble but others could point out that the writing had been on the wall already since deregulation. What changed was bush stopped bailing them out which forced all the legacy carriers to restructure over the ensuing decade

At the time, I recall most of the misgivings was that it relied on the fortunes of one carrier. 9/11 did a lot to shake out the industry. Don't recall any wise prognostications back then against expansion other than the problem of relying on one carrier. They were even so bold as to plan for further expansion.

[bradjl2009]

Interesting article I saw on KDKA just now, with no new details of who or what it will be though. We should know within a few hours however. Hopefully it's not another Florida destination, I think we have enough of those as it is.

Pittsburgh International Airport To Tout New Flights, Jobs « CBS Pittsburgh

[Geeo]

It's a new One-Jet route to Hartford. It's on the Business Times website. One Jet will also establish a crew base at the airport and will add four additional routes (not announced yet).