Fares at Pittsburgh Have Dropped with Airline Changes

Tom Murphy, meet Walt Glazer.

Mr. Murphy, the former Pittsburgh mayor, made headlines 11 years ago when he bypassed Pittsburgh International Airport and drove to Cleveland to get a less expensive air fare.

Mr. Glazer, who lives in a Cleveland suburb, did the reverse, driving to Pittsburgh to get a lower fare and a nonstop flight to Raleigh, N.C., on US Airways, nonetheless. Mr. Glazer said he would do it again "if the circumstances were right."

"It was easier to drive over there and get a direct flight, and it was cheaper than flying out of Cleveland or Akron," he said.

With the collapse of the US Airways hub and the emergence of such low-cost carriers as Southwest Airlines and JetBlue, flying from Pittsburgh is no longer through-the-roof expensive. Five years ago, average fares at Pittsburgh International were $28 above the national average. Now they're $1 below.

It's all part of an extreme makeover, bringing both good news and bad, that the airport has put itself through since 2001.

Two US Airways bankruptcies and its ultimate merger with Tempe, Ariz.-based America West Airlines have cost the Pittsburgh region nearly 10,000 jobs, many of them highly paid. It's likely those jobs, like the airport's hub status, are lost for good.

While the loss of the US Airways hub has opened the door for more competition and lower fares, it has severely reduced local flight options and cut the number of total passengers nearly in half, increasing airport costs to the airlines.

Since August 2001, nonstop destinations from Pittsburgh International have fallen from 114 to 70, the number of daily flights has been halved and service to Europe has been axed. Some believe the loss of the hub has hampered the region's ability to recruit businesses.

The airport's transformation, born of necessity, has been a double-edged sword, bringing competition and lower fares but at the cost of numerous jobs, said F. Michael Langley, chief executive officer of the Allegheny Conference on Community Development.

Mr. Langley said there was no way to claim that enormous job cuts are a good thing. At the same time, he believes, the airport is charting a course more beneficial to its long-term health and that of the region.

"For the future, I think we're in a better place because we're no longer leveraged by one carrier. We now have significant diversity and competition at the airport, which has significantly lowered prices," he said.

Chuck Henschel, a transportation executive who served on a 2002 Urban Land Institute panel that looked at the airport and the region, agreed.

"I believe that US Airways provides a wonderful service to the Pittsburgh community. But I think it's important to have alternatives and to have competition, which drives prices down and makes for healthier air service choices for the flying public," he said.

There's no doubt the competition is better. In August 2001, the only major low-cost carrier among nine major airlines serving Pittsburgh was AirTran Airways.

Five years later, the airport boasts four low-cost carriers among 10 major airlines, including two of the most coveted, Southwest and JetBlue. They have brought lower fares to popular destinations such as New York; Boston; Philadelphia; Chicago; Orlando, Fla.; and Las Vegas.

Ernie Lengyel, a frequent business traveler, appreciates the variety.

"I lament the job loss. But we were captives here and we're not captive anymore," he said as he waited at the airport. "I think, for the traveling public, it's been a real boon."

Keli Frentzos, of Regent Square, said she and her husband were flying more than ever because of lower fares. She said prices to Boston alone, one favorite destination, have dropped from $600 round trip to $220 or less.

"[Fares] definitely have gotten better," she said.

But while fares have dropped to popular destinations where there's competition, they still can be high to markets where there is none. And travelers now find their choices more limited.

Overall, 44 nonstop destinations have been lost and the frequency of flights on some other routes has been cut. Bill Lauer, a local airline analyst, believes the changes have resulted in a net loss for the region, and not only because of the job cuts.

He believes the cutbacks have hampered the region's ability to attract businesses, and that the losses of nonstop service and frequency outweigh fare reductions.

"A difference of $30 or so [in fare] is, I think, meaningless from the standpoint of the business traveler. It's far more important to have the selection and availability of a variety of destinations," he said.

"Business traffic is the lifeblood of regional economic development activity. With fewer flights, fewer choices available, it cannot be seen as a plus," he said.

But Mr. Langley and Allegheny County Airport Authority Executive Director Kent George said the airport still serves 28 of the 30 top markets identified in a survey of regional business leaders. Each has at least three direct flights a day, seven days a week, Mr. Langley said.

"That's phenomenal that, with the loss of as many flights as US Airways has pulled out of here, we've been able to get those flights covered by other airlines," he said. "That's a testament to the market."

Perhaps the most significant loss involves international service. Where the airport once had nonstop service to Paris; London; and Frankfurt, Germany, it now has no flights Europe.

Mr. George said the lack of nonstop overseas service had been a "major disappointment." Without the hub, the region cannot generate enough traffic to fill international flights originating here, he said. In five years, connecting traffic has dropped from 58.6 percent of all traffic to 16.6 percent, virtually all the result of US Airways cutbacks.

The loss of direct overseas service is of "enormous consequence," Mr. Lauer said, because it forces business travelers to connect through the East Coast rather than fly nonstop, costing them precious time.

"This has a massive ripple effect. All of the sudden, Pittsburgh becomes a slightly less attractive place for European businesses," he said.

Kit Newton, a local spokesman for the giant German manufacturer Bayer Corp., whose employees take about 800 international trips a year from Pittsburgh, said the primary impact had been a loss of productivity.

"It takes an extra four hours to reach the destination. That loss of productivity can be expensive," he said.

While less service "hasn't been a deal-breaker for us," it could put the region at a competitive disadvantage, he said.

"It can't help. I think, with new businesses, that's one of the things they look at. I don't know if it would be a deal-killer but it certainly couldn't help," he said.

Mr. George said restoring European service was his "number one priority." Despite the demise of the hub, returning the flights "is not a lost cause," because carriers now fly smaller planes longer distances, making it cheaper for airlines to serve cities such as Pittsburgh.

"We haven't given up," he said.

The airport could face more losses. US Airways is dropping seasonal service to Seattle and San Diego this fall and will be reducing the number of flights to San Francisco.

Fewer flights, fewer destinations, lower fares

%% .................................................2001..........2006

Average air fare, one way domestic (1st quarter..$181..........$141

compared to top 50 airports......................$153..........$181

Non-stop destinations (August)....................114............70

Daily flights (August)..........................1.322...........648

Percentage of connecting traffic (August)........58.6..........16.6

.................................................2001..........2005

Total air mall sales......................$89,860,000...$65,300,000 %%

25% drop in sales; 50% drop in passengers



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