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Can airport gain from congestion on East Coast?
Experts doubt Pittsburgh will ever come back, but local officials say it's perfect for congestion relief
Sunday, November 18, 2007

Some of the nation's biggest and busiest airports are under siege.

With congestion worsening and delays growing longer, President Bush last week ordered the opening of unused military airspace for the Thanksgiving and Christmas rush.

Airports in New York City, Philadelphia and Charlotte, where many Pittsburgh flights go, are at the bottom of 32 major airports in on-time departures. Delays there have a domino effect on flights across the country.

At the same time, Pittsburgh International Airport, about an hour's flight from the East Coast, sits nearly half empty.

With an abundance of gates and airspace and only about a third of the daily flights it had six years ago, the airport seems perfectly positioned to take advantage of the chaos.

Yet analysts don't see it ever returning as a hub, either for US Airways or another airline. They argue that the region just doesn't have enough people.

"No airline is interested in investing huge resources to make that a connecting hub," said Mike Boyd, a Colorado-based aviation consultant. "There's no market need for that."

But Allegheny County Airport Authority Executive Director Bradley D. Penrod sees evidence to the contrary in Cleveland.

That's where Continental Airlines is spending $50 million to add at least 70 flights at its Hopkins International Airport hub, in large part to relieve congestion at its Newark, N.J., hub, where only 67.6 percent of flights departed on time through the first nine months of 2007.

Mr. Penrod believes more and more airlines will look to other airports for relief as fuel costs rise, congestion worsens, and the FAA imposes measures to deal with it.

Poised as relief valve

Even before Mr. Bush acted, the Federal Aviation Administration, reacting to congestion at New York's John F. Kennedy International Airport, had begun considering a plan to charge airlines more to land during peak times and mandatory caps that would cut departing flights by 20 percent.

Through September, JFK had the second worst on-time departure performance of 32 major airports, with only 66.8 percent of all flights taking off on time, according to the U.S. Department of Transportation. (At Pittsburgh, which is no longer considered a major hub, departures were on time 76.7 percent of the time.)

US Airways' two major East Coast hubs, Philadelphia International Airport and Charlotte Douglas International Airport, were nearly as bad as JFK. Philadelphia was 29th, with 68.2 percent of flights leaving on time. Charlotte was 28th, at 69.4 percent.

In the past, the Pittsburgh airport has served as a way station for aircraft diverted from the East Coast because of bad weather. Mr. Penrod believes the same can happen to battle congestion. Pittsburgh is hub-ready, with no need to build more runways, gates or other infrastructure.

"With the airspace, the terminal facilities, and the airfield, we're very well poised to be a relief valve and a great assistance to not only the airlines, but the industry," he said.

Mr. Penrod said that even when US Airways was at its peak in Pittsburgh, with more than 500 daily flights, airport airspace was filled to only 65 percent of its capacity.

While he agrees with analysts that population is an important factor in hubbing -- where airlines send passengers on connecting flights through one airport -- he also thinks the industry is changing.

As rising fuel costs and passenger inconvenience become more pressing issues, "we become a very inexpensive alternative that's available tomorrow," he said.

Since US Airways announced that it would be cutting more service in Pittsburgh in January, the airport has been making that pitch to airlines and has talked to the FAA about the "significant resources" available in Pittsburgh, Mr. Penrod said.

Michael Langley, chief executive officer of the Allegheny Conference on Community Development, said that the recent increases in origin and destination traffic in Pittsburgh -- travelers who start and end their flights here -- bode well for the region in attracting more connecting traffic. He also believes that a more liberal "open skies" agreement with European Union countries to take effect next year could also benefit Pittsburgh.

"With open skies on its way, with the changing industry, you're going to see more and more airlines see the value in Pittsburgh International Airport," he said.

Pittsburgh is courting traffic because of repeated cutbacks by US Airways at its former hub. By January, the airline will be left with 68 daily flights and 1,800 employees here, down from highs of 542 flights and 11,995 employees before 9/11.

A lot of that connecting traffic left Pittsburgh for Philadelphia, where the airline has faced repeated problems with baggage and flights delays.

Last month, only 47.1 percent of all flights took off from the airport on time, the second worst among airports in North America, compared to 75.6 percent in Pittsburgh, according to Flightstats, an airline, airport and travel information service.

As for arrivals, 67.6 percent were on time in Philadelphia in October, compared to 80 percent in Pittsburgh. Through September, US Airways had the second worst on-time arrival percentage (66 percent) of 20 major airlines in the country, based on U.S. Department of Transportation statistics.

Philadelphia just 'better'

The US Airways executives who made the original decision to shift flights from Pittsburgh after the 9/11 terrorist attacks knew that Philadelphia would be a challenge and that fixing it "would be an enormous task," said Chris Chiames, a former senior vice president who left the airline when it merged with Tempe, Ariz.-based America West Airlines in 2005.

They also believed that Philadelphia, with its larger population and international gateway, offered greater revenue opportunities for an airline battling to survive a severe industry downturn, two bankruptcies (in 2002 and 2004) and the rise of a new breed of low-cost carriers.

"It was pretty clear Philadelphia was a better place to grow, to be blunt," said another former US Airways executive involved in the initial planning.

This executive, who requested anonymity because he still works in the industry, recalled ex-Pittsburgh airport executive director Kent George asking what the airport could do to get some US Airways flights back. His response was: " 'Get everyone who lives in Detroit to move to Pittsburgh.' The problem isn't that they don't have a good airport or not have enough gates or costs are too high. It is that US Airways built the operation there larger than what the city could support."

Comparing the airport problems in Philadelphia to the greater efficiency of Pittsburgh International is akin to debating "whether the Eagles or the Steelers is the best team," said Mr. Chiames, the former US Airways senior vice president. To do so, he argued, is to miss the larger point.

"Unfortunately, when it comes to serving as a major hub airport, the local Pittsburgh traffic levels and economic fabric don't support that large of an operation," he said.

The current management team at US Airways is of the same mind on this issue. Spokesman Phil Gee said in an e-mail that a connecting hub in Pittsburgh "made some economic sense years ago," but "connecting hubs don't work any more and haven't for some time. We've seen this play out at connecting hubs all across the country: Columbus, Ohio; Raleigh-Durham, N.C; Nashville, Tenn; Kansas City and St Louis are examples of airports that were built up as connecting hubs but couldn't survive. ... You need to have strong local origin and destination traffic in order to have a successful hub, which is why Philadelphia, Dallas, Chicago and Atlanta work."

No more hubbing

Top analysts also see the re-emergence of Pittsburgh as a hub as more wishful thinking than reality.

Mr. Boyd described the longtime US Airways hub in Pittsburgh as a "historical accident," one based more on predecessor Allegheny Airlines' roots here than anything else.

Airlines traditionally have built hubs in high population centers, where they use high fare revenue generated by origin-and-destination traffic to support the connecting operations.

"It is not about transferring traffic. It's about capturing revenue," said Darryl Jenkins, an airline consultant.

Philadelphia generated almost $2.5 billion in origin and designation revenue in 2006, according to Reston, Va.-based aviation consultant Eclat Consulting, with $1 billion of that going to US Airways. In Pittsburgh last year, origin and destination revenue topped out at $1 billion, with $383 million of that going to US Airways, according to Eclat.

Local analyst Bill Lauer said one problem with diverting East Coast traffic here is that most of the traffic coming out of big airports like LaGuardia, Newark, Washington and Boston is origin and destination, not connecting.

Pittsburgh could be a good airport to serve as a connecting hub for the international flights that help to clog East Coast airspace. But convincing an airline to do so might be hard, Mr. Lauer said, given that low-cost carriers like Southwest, AirTran, and JetBlue are competition on many of the most profitable domestic routes from Pittsburgh.

"To attract American or United with an appropriate number of flights to provide connecting traffic for international flights, you would have to persuade them that there is significant 'O and D' they could poach from someone else and do so profitably. I'm not sure they would be easily convinced of that," he said.

And as maddening as delays can be for travelers, most would rather endure a wait on a runway or ramp for a non-stop flight than wait and then have to connect through Pittsburgh or another city, analyst Terry Trippler said.

He and others see the potential for Southwest, AirTran and perhaps other airlines to add some flights in Pittsburgh. Mr. Boyd believes Southwest, now with 23 daily flights from the airport, could end up with 60 to 70, "but I don't know if that will happen anytime soon."

Mr. George, who battled US Airways over its Pittsburgh International lease cancellations and cutbacks, still sees some potential for US Airways returning some flights here.

"It's very obvious that Philadelphia doesn't work as a connecting facility. Everybody in the industry knows that except US Airways. So as an O and D market, it's a great market. But it doesn't work as a connecting market because of the constraints in operations and so forth," he said. "It would be foolish if US Airways didn't consider Pittsburgh."

But the current management is giving no signs of changing its mind on the issue, even as Philadelphia continues to be a problem for the company. There were problems this past summer as US Airways tried to expand its international operation, scheduling more flying "than we normally would have on the available gates," US Airways chief executive officer Doug Parker said in an Aug. 29 letter to his employees.

In fact, it tried "nesting" 19 international flights on 16 gates. The practice -- which involves the departure of two planes from a single gate by towing one out of the way while the second is loaded -- "works on good days," Mr. Parker said, "but when things get behind ... it doesn't work so well, as we all experienced."

US Airways now claims it will not use the "nesting" procedure again in Philadelphia. Mr. Parker wants more room there but has made no threats to move flights elsewhere if he does not get what he wants. And there certainly is no talk of ramping up in Pittsburgh again.

"I don't think Pittsburgh will become a hub again," said the former US Airways executive who requested anonymity, "and I don't think people in Pittsburgh should be bothered by that." The airlines in Pittsburgh will continue to charge less than what US Airways once charged when it had a local monopoly and [will] fly "everywhere Pittsburghers want to go."

Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262. Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.
First published on November 18, 2007 at 12:00 am
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