Consultant: Entice airlines by offering subsidies


June 14--Area leaders should consider offering subsidies to entice airlines to add or expand service at Pittsburgh International Airport, an industry consultant said on Monday.

"You should do everything, including underwriting flights, to get as many highways in the sky as you can," said John D. Kasarda, director of the University of North Carolina's Kenan Institute of Private Enterprise and author of "Aerotropolis: The Way We'll Live Next."

There doesn't appear to be support for the idea if it involves public money.

"I don't agree with subsidizing flights or subsidizing certain airlines. We should work to lower the costs of all of the airlines at the airport," said Allegheny County Executive Dan Onorato. He said the county doesn't have money to provide such backing.

Pennsylvania and the Allegheny Conference on Community Development agreed to provide up to $9 million if Delta Air Lines' flight between Pittsburgh and Paris missed revenue targets. They paid the maximum $5 million after the first year of service, but it's unknown whether they will owe money for the second, which ended June 1.

Brad Penrod, executive director of the Allegheny County Airport Authority, said Federal Aviation Administration guildlines prohibit authorities from directly subsidizing airlines' operational costs. But the Allegheny County authority has waived all or part of landing and other fees to attract new carriers, he said.

Eric Montarti, Allegheny Institute for Public Policy senior analyst, said, "There has been quite enough public involvement in developing the airport and land around it," going back to bonds that covered the airport's $1 billion construction in the early 1990s. The airport was built largely to the needs of US Airways, which closed its local hub more than a decade later.

Kasarda spoke at a conference in Moon at which participants are looking for ways to expand development and business opportunities at Pittsburgh International and make it a central business district, of sorts, for the region's economy. Recommendations will be outlined today.

Kasarda pointed to airports elsewhere, including Washington's Dulles International, which has more Class A office space around it than all of the District of Columbia; Amsterdam's Schipol Airport, which is surrounded by more than 1,000 companies; and cities that have sprung up on the edge of Dallas-Fort Worth International and Panama's Tocumen Airport.

Onorato said development on 10,000 acres of county-owned land around Pittsburgh International has taken off since 2005, with $60 million in public investment for infrastructure work clearing the way for more than $1.2 billion in private investment.

"If you can make the Pittsburgh region the fastest, most agile location for businesses, it will be competitive in the 21st-century business wars," Kasarda said. He said that includes improving air service for would-be business travelers.

"Airlines will go where they can make money," but said underwriting wouldn't be needed if seats were filled, Kasarda said. A major corporation offered to underwrite a flight between Raleigh, N.C., and London, but hasn't had to shell out any money because the flight has been a success, he said.