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US Airways' dominance at airport dwindling
Saturday, April 09, 2005

While US Airways is still Pittsburgh International Airport's dominant airline, its share of the market is eroding, largely a result of its decisions to drop Pittsburgh as a hub and eliminate hundreds of daily flights over the last four years.

For the first time since the midfield terminal opened in 1992, US Airways is carrying less than 70 percent of the passenger traffic out of the airport.

At one time, US Airways carried 89 percent of traffic. But in the latest statistics released by the Allegheny County Airport Authority, the airline is flying 63.1 percent of all travelers. Other carriers account for 36.9 percent.

In March, US Airways scheduled 884 fewer flights on a weekly basis than it did in the same month in 2004.

The cutbacks have opened the door for other carriers. Southwest Airlines, the nation's largest discount carrier, starts service to Philadelphia, Chicago, Las Vegas, and Orlando next month. Hooters Air, which started service with three flights to Myrtle Beach in February, plans to add a fourth flight next month.

Combined, other carriers have increased their weekly departures by 155 since March 2004. Northwest has added 50 departures, United 26, Delta 22, Continental 15, and AirTran, 14.

While other carriers have profited from the cutbacks, they have not been able to generate nearly enough traffic to offset the US Airways losses. Overall, airport traffic was down 28.2 percent in February, compared with the same month last year.

To offset the losses, the authority has closed the airport's commuter terminal and part of one main concourse. Yesterday, its board approved an amended contract with BAA Pittsburgh, manager of the Airmall, the collection of airport retailers and restaurants. Amendments were sought because of traffic reductions.

As part of the deal, the authority will lose a $3.3 million payment that was due this year under a contract renegotiated three years ago. BAA was to pay the authority $10 million in exchange for a contract extension until 2017. With the amendment, the authority will keep $6.7 million of that, and its percentage of gross revenues from concessions will increase to 59 percent from 56 percent starting in 2006.

"As a partnership, we sat down and modified the agreement to reflect a neutral rate of return for both parties," authority Executive Director Kent George said. "We did not want BAA to go anywhere. They do a tremendous job for us."

Despite the drop in traffic, Airmall sales total more than $12 per passenger, the best in the world, according to the authority.

The authority board also agreed to an amended lease with airline caterer LSG Sky Chefs, lowering the rent for a company whose gross revenues have gone from $14 million a year to $6 million and whose work force has been cut from 450 employees to 80 because of cutbacks by airlines. Many airlines have dramatically scaled back or eliminated in-flight meals.

Also, AirTran has agreed to a long-term airport lease that commits it to Pittsburgh until 2018. AirTran will cut its overall airport costs by 20 percent.

First published on April 9, 2005 at 12:00 am
Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.