Tarmac troubles twofer
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.
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.