Friday, March 12, 2010

Tarmac troubles twofer

Let me say upfront that it's great having a European flight out of Pittsburgh..  That and I have used it myself more than once and will likely do so in the future if the flight continues.

That is the question though... will it continue?

News just out shows the accounting of the Pittsburgh to Paris flight started last year.  The big news at the time was that the flight was backstopped by a joint Allegheny Conference/Pennsylvania guarantee if the flights revenues fell below a certain threshold.

They did.

Big time, unfortunately.

The guarantee was that the ACCD and then the state would provide up to $5 million in relief to Delta for the amount of revenues they collected that fell below a negotiated level. According to the info just out, the full amount of that relief from both the ACCD and the state will be collected by Delta for the first year.  If only some of it was used it would not have been news.  If the subsidy was small enough it would have been a big success.. But that the full amount was used is the biggest point and opens up the possibility Delta is really losing money even with the subsidy.

The utilization of the flight dropped to a low of 53% last November and that's an average number. That was obvious to me as early as last summer, which is a peak season.  As I pointed out back then, I was on a flight well below what was expected in both utilization and cost and commented on how it must be resulting in failing to meet the guarantees that would trigger the subsidies. 

Begs lots of questions.  Going forward if the flight is going to continue, it would seem reasonable that the guarantees would have to be extended.  Is that feasible?  I honestly was a bit surprised in the beginning that the ACCD had a couple million to throw into the pot, but the state is itself now facing huge budget issues so the payment now due, let alone any future subsidies will be quite painful for the folks in Harrisburg to come up with.

No doubt...  the recession is the big story in just how bad the flight has performed.  Not the whole story, but we will never know what the results would have been if the economy had been doing better.  The thing about recessions like this is that they do alter behavior of both businesses and individuals.  So even as the economy improves, businesses have learned to economize with their travel in ways that will persist longer than the recession itself will hang on.

and I have to point out...  imagine how bad sales would have been if we had elected the mayoral candidate whose main policy plank was to send the Statue of Liberty back to France.   They might have gone on work stoppages over there whenever the flight arrived at CDG.


Blogger Adam said...

I took it last summmer for a trip that didn't involve France mainly but Italy and Germany (business not pleasure). I see two main problems:
1) The flight back to Pittsburgh leaves too early in the morning for connecting flights from most places in Europe. I was coming from Leipzig and the only way to do it was to come the day before and stay a night in Paris. I realize that some people would consider an excuse to visit Paris a good thing but it adds time and cost especially for the business traveler. I met a few people on the plane who did come from other places (bigger cities than Leipzig) but had to wake up mighty early in the morning and had a very close connection.
2) A smaller problem in comparison: I did it to try to be a good corporate citizen but I winced when I realized what all those transatlantic miles would have done for my USAir preferred status had I gone via Philadelphia or DC (United/Lufthansa). A lot of people around here still have a lot of USAir miles.

There isn't anything Delta can do about #2 but it seems they could solve #1 by moving the return flight to early afternoon.
The advantage of skipping the Philly airport is lost if you have a lot of inconvenience on the Europe end.

Friday, March 12, 2010 5:29:00 PM  
Anonymous Ken Zapinski said...

We've worked very closely with Delta and Air France to time the return back to the US appropriately. It departs Paris at 10:40 a.m., which is plenty of time to make connections from the early bank of arriving flights from across the continent which account for most (not all) of the most popular destinations. And the early return -- arriving at PIT before 2 p.m. -- is one of the primary advantages of the flight, according to the market feedback we're receiving. It doesn't work for every passenger to every destination, but we think it works well for the most popular destinatiosn for Pittsburgh's international traveling community.

Monday, March 15, 2010 10:00:00 AM  
Blogger C. Briem said...

It is good to get back early on the return leg I admit.. but the early departure has been an issue even for returns from heathrow. I'd have to check the exact time, but I think I was forced into a 6:30 am departure which really was rough. If not for the interest in supporting the flight I would not have done it. Heathrow is a little saner it seems to me since they built the new terminal, but still almost missed the connection.

that's actually the real scary part of the low utilization for the flight thus far. We know lots of folks both individually and more with pseudo-corporate policy are pushing the use of the flight.. yet even with all that push the numbers are low.

Monday, March 15, 2010 11:21:00 PM  
Anonymous Anonymous said...

I've taken the flight back and forth many times and love it. but we are down to 4 days a week :for the business traveler leaving /Monday/Tuesday to come back /Friday/Saturday, there are already many combination that are not possible.
Flights were cancelled during last week of February and first week of March even after France air controller strike ended (which was not supposed to affect international flights). So it is a little bit scary to plan to take the direct flight to Paris after 6PM, knowing that backup options will be limited if it gets cancelled.
Finally nothing that Delta can do about it, but what's the point of advertising a 2PM arrival (and sometimes sooner actual), if the Pittsburgh airport consistently takes more than 1h to process checked luggage from customs to the main terminal carrousels? Seriously, one international flight a day is great for getting processed quickly though immigration and customs, but it always feels like a joke when the flight gets removed of the luggage carousel monitors after 45 min, and Delta employees tell us " that doesn't mean anything, just wait a little longer".
Most recent flight I ended up leaving the airport after 4PM which then becomes a nightmare if one has to drive through the city in rush hour traffic and takes away the benefit of landing early.
All in all, I hope the flight does better so we can keep it, it'sa worth it just to avoid JFK/Philly or DC.

Wednesday, March 17, 2010 12:23:00 PM  

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