PIT lowers fees; more service sought

Airlines will pay less to operate at Pittsburgh International Airport next year, but an industry observer says that alone won't entice airlines to boost service locally.

The Allegheny County Airport Authority on Friday adopted a $154.5 million operating budget for next year that will reduce airlines' average cost per passenger to $14.28, down 3.5 percent from this year. Landing fees will drop 2.8 percent, terminal lease rates will go down 3.5 percent and ramp fees will decrease 12.1 percent.

"It's something that will hopefully attract more airlines and more service" at Pittsburgh International Airport, said authority board member Dennis Davin.

Bijan Vasigh, an economics professor at Embry-Riddle Aeronautical University in Daytona Beach, Fla., said it's smart for Pittsburgh to reduce fees at a time when tough economic conditions and high fuel costs are forcing many airlines to trim flights.

At the same time, while reduced fees can influence where airlines keep or add service, Vasigh said, "It's not the entire factor. Economic conditions and demand are the most crucial issues."

Next year's budget predicts service will remain about the same as this year, with an estimated 4.2 million departing passengers. Officials said growing non-airline revenues, including parking fees that are expected to increase by $2 million, are enabling the authority to reduce airline fees.

The operating budget sets aside $62 million for debt payments, mostly related to the $1 billion construction of the airside and landside terminals two decades ago. About $430 million in long-term debt is scheduled to be paid off by 2018.

The authority also approved a $35.7 million capital budget for improvements to facilities.

The airport authority reported that Pittsburgh International had 767,792 passengers in August, a 2.2 percent increase over August 2010. It was the 16th monthly gain in the past 17 months. Traffic dipped 1 percent year-to-year in July.