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Airport authority cuts '09 fee hikes
Thursday, November 27, 2008

A month after drastically raising fees airlines would pay next year, officials at Pittsburgh International Airport are cutting them a bit of a break, although not a full reprieve.

The Allegheny County Airport Authority announced yesterday that it would reduce the proposed increases in landing, terminal and ramp fees by 4.4 percent to 5.5 percent after trimming $3.4 million in 2009 spending.

Even with the cuts, however, the airlines still will be facing fairly hefty increases in 2009.

The new landing fee rate will be $3.22 per 1,000 pounds, down from the $3.37 proposed in the 2009 budget but still higher than the current $2.50. Terminal fees will drop to $141.40 per square foot, down from $149.62 but more than the current $110.01. Ramp fees will fall to $575.06 a lineal foot to $549 but will remain well above this year's $197.47.

Airport authority Executive Director Bradley D. Penrod said the $3.4 million in savings came by deferring some capital projects and by revising earlier budget calculations.

He said, for example, the authority was able to reduce proposed spending for fuel because of the dramatic fall in gasoline prices. It also is expecting increases in non-airline revenue like parking and concessions, in part because of the new nonstop Pittsburgh to Paris service to start in June.

"The trends that we've seen we've taken as a good sign," he said, noting that parking revenues, for instance, were up $300,000 in October compared with the same month in 2007.

The authority also won't spend capital money to rehabilitate its own maintenance facilities or to do miscellaneous taxiway work. That will save the airlines money because they won't have to come up with the local share for the projects.

While the cuts won't come close to wiping out the increases approved last month, Mr. Penrod said the overall costs to the airlines, at $64.8 million, are $600,000 lower than they were in 2007. That's despite the fact that costs have gone up and the authority has taken on more services as the airlines, particularly US Airways, have cut back, he said.

"I think that's a significant accomplishment," he said.

The reductions came after a meeting earlier this month during which representatives from the airlines urged the authority to "look harder" for ways to cut costs. Mr. Penrod said he believes officials have met that challenge.

Southwest Airlines, which was upset over the increases proposed last month by the authority, is "pleased that they heard our cry and lowered them to what they are now," spokeswoman Ashley Rogers said.

But, she added, the airline, the second largest at Pittsburgh International, would like to see further reductions in the rates.

"From what we're paying now, it's still an increase. That increases the cost for Southwest Airlines for every plane it lands at the airport. So, obviously, in this environment, we like to keep our costs low. So, of course, we'd like to see them as low as possible," she said.

There won't be any further reductions before January, Mr. Penrod said. The new rates were sent to the airlines yesterday and will take effect at the start of the year.

At the same time, Mr. Penrod said he is hoping the authority will be in a position to make a mid-year adjustment that would further lower the rates. Whether that happens depends on many factors, including the winter weather and passenger traffic.

The authority is budgeting for 4.1 million boardings next year. If the airlines board more travelers, the rates could come down. The fees are directly related to volume: As flights decrease and fewer passengers use the terminal, the rates go higher.

Recent rate increases have been largely the result of the dramatic cutbacks by US Airways, the dominant carrier which eliminated Pittsburgh as a hub and dropped hundreds of daily flights.

Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.
First published on November 27, 2008 at 12:00 am