Tuesday, October 30, 2007

more on USAirways

Something I had started to write up but I see the PG has the story today: Southwest calls airport's fees a large concern. I have to wonder if the airport can survive all of this downsizing by USAirways. Of course, I don't think the airport will ever shut down, but from a financial point of view you have to wonder how it can maintain solvency. The Department of Transportation had this study done in 2003 which applies directly to our situation you would think:

IMPACT OF AIR CARRIERS EMERGING FROM BANKRUPTCY ON HUB AIRPORTS, AIRPORT SYSTEMS AND U.S. CAPITAL MARKETS


That report is remarkably upbeat about how Pittsburgh could survive a post-US Airways world. I'm unclear if they really took into account the scale of downsizing that actually happened. But for now I wonder whether the airport can really keep responding to fewer flights by raising fees. At some point that becomes counterproductive. I am not an expert on airport finances, but I would say its worth the effort to compare the terminal fees that Pittsburgh has compared to other airports near and far. Anyone know of a source for that data already?


There is one positive story to this. If you had said a few years ago that the region's largest private employer was going to virtually disappear you would have predicted an awful amount of bad things to be happening and that just has not materialized. That in itself says a lot about how the local economy has changed in recent decades. For the airport authority itself however, it's a different story. I would be curious if it has any sustainable financial path for the future. There is still a lot of debt ($500mil+) on the books and you have to wonder about those payments. Some big balloon payments are coming due within 5 years which will force some new bonds to be issued. I'm sure the ratings agencies are going to chime in again soon.

For USAirways which caused all of this, another news blurb just out says some new survey results show it is viewed as the worst global airline. I have to admit I don't believe those poll results a bit from what I read in that short piece. It says BA was rated 1st last year and now comes in third which is still pretty high. Not really a knock on BA, but if you fly BA you are going to have to go through Heathrow which is just such a disaster these days. Read the last line in that blurb which is also worth noting: "43% had six weeks or more " (of vacation). Anyone have the comparable number for the US.

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