Travel boom hits Pittsburgh airport after US Airways cutback
By Scott McCartney
The Wall Street Journal
Communities think of the loss of an airline hub as a doomsday scenario - less traffic and less prestige. But in Pittsburgh, the opposite happened this year: After US Airways pulled half its flights, local travel increased sharply.
Since US Airways announced last fall that it would stop using Pittsburgh International Airport as a "hub," five discount airlines came rushing in and bigger legacy airlines beefed up service. Fares plunged: Prices for round-trip flights from Pittsburgh to Philadelphia, for example, fell to $186 from $680. So, people travel more. While the number of connecting customers is down sharply at Pittsburgh, the number of passengers beginning trips there was up 12 percent in September compared with last year, according to the airport's manager, the Allegheny County Airport Authority.
Pittsburgh's experience shows the price many communities across the country pay for having an airline hub at their local airport. While these airports offer the convenience of hundreds of nonstop flights to scores of destinations, hubs also suppress local travel. That is because, until recently, low-cost competitors shied away from battling bigger network airlines at their dominant hubs. The lack of competition led to high ticket prices that stifled local travel.
A 2001 U.S. Department of Transportation study of hubs found that on the whole, travelers in hub markets paid 41 percent more than travelers from competitive markets. Charlotte, Cincinnati, Minneapolis and Pittsburgh had the highest hub prices, the study found.
In the past several years, things have begun to change. Discount carriers with strong balance sheets have made inroads at many hubs. In response, incumbent airlines began cutting business-travel fares. For example, Delta Air Lines cut fares at its Cincinnati hub, AMR Corp.'s American Airlines cut fares in Miami and US Airways moved to quickly match Southwest Airlines pricing in Philadelphia.
Still, Bob Downey, who used to have the top frequent-flier status at US Airways, has switched loyalties. To fly to Pittsburgh two weeks ago, he happily drove two hours from his Albany, N.Y., home to catch a Southwest flight from Hartford - and save several hundred dollars.
"US Airways was an option, but it was twice the fare," said Mr. Downey, who owns his own medical-supply business.
One of the most drastic post-hub changes has been in the price of a Pittsburgh to Philadelphia flight. That route was priced at $680 round-trip when US Airways had a monopoly, encouraging many travelers to drive the five hours, instead. Then the price plunged to a maximum of $186 round-trip when Southwest began flying to Pittsburgh in May. Many more people now fly the route.
To keep up with the demand, US Airways now has a dozen daily flights in each direction between the two cities, up from eight in January. Southwest has six daily flights each way.The same is true for the Pittsburgh to Washington, D.C., market. The average fare in the first quarter of 2004 was $634 round-trip, according to DOT data. But Independence Air began flying the route in August 2004, and by the first quarter of 2005, the average fare had fallen to $326 round-trip, and the number of passengers more than doubled, according to the DOT.
In all, the average business-travel fare into and out of Pittsburgh was 19.1 percent lower in October than a year earlier, according to airfare-tracker Topaz International Ltd.
"The benefits of a hub come at a very high price," said Kent George, executive director of the Allegheny County Airport Authority. "Now we have the good old American free-market system responding to demand."
Lower fares - and the increased local traffic they have brought - have affected all parts of the airport. Car rentals are up 10 percent this year in Pittsburgh, the airport has had to add more parking, and Pittsburgh's massive airport mall has maintained 100 percent occupancy.
Still, there have been hassles for both travelers and the community. Pittsburgh has lost nonstop flights to 50 different cities, mostly small markets, as US Airways dropped to about 200 flights a day from a peak of more than 400.
The airport's total traffic, which peaked at more than 10 million passengers boarding planes in 1997, will only be about six million this year.
And the retrenchment has meant massive job losses at the airport, as employment at the airport has fallen to 3,500 from 11,500, George said.
To cope with the loss, the Pennsylvania Legislature pledged $150 million from gambling revenue over 10 years to pay for facilities such as gates that were abandoned by US Airways.
Part of that will cover the $7 million annual cost of operating a baggage system that US Airways stopped paying for in its bankruptcy reorganization.
The airport is finding it can run a lot more economically when it doesn't have to grapple with the inefficiencies of a hub - waves of planes coming in and leaving at the same time, followed by emptiness until the next wave.
Instead of doing maintenance on runways in the middle of the night, for example, airport officials now close one of their four runways during the day and get work done cheaper.
"Pittsburgh International Airport is going to survive without any problems," George said.
Fears have eased that the airport's in-terminal shopping mall would collapse.
Sales are down 10 percent from last year - not as bad as feared, according to Jay Kruisselbrink, vice president at BAA Pittsburgh Inc., the mall's developer and manager.
One saving grace for the mall is that passengers who begin and end trips in Pittsburgh actually shop longer and spend more than people rushing to make connections. The average sale has climbed to $12.05 from $8.30, George says
By Scott McCartney
The Wall Street Journal
Communities think of the loss of an airline hub as a doomsday scenario - less traffic and less prestige. But in Pittsburgh, the opposite happened this year: After US Airways pulled half its flights, local travel increased sharply.
Since US Airways announced last fall that it would stop using Pittsburgh International Airport as a "hub," five discount airlines came rushing in and bigger legacy airlines beefed up service. Fares plunged: Prices for round-trip flights from Pittsburgh to Philadelphia, for example, fell to $186 from $680. So, people travel more. While the number of connecting customers is down sharply at Pittsburgh, the number of passengers beginning trips there was up 12 percent in September compared with last year, according to the airport's manager, the Allegheny County Airport Authority.
Pittsburgh's experience shows the price many communities across the country pay for having an airline hub at their local airport. While these airports offer the convenience of hundreds of nonstop flights to scores of destinations, hubs also suppress local travel. That is because, until recently, low-cost competitors shied away from battling bigger network airlines at their dominant hubs. The lack of competition led to high ticket prices that stifled local travel.
A 2001 U.S. Department of Transportation study of hubs found that on the whole, travelers in hub markets paid 41 percent more than travelers from competitive markets. Charlotte, Cincinnati, Minneapolis and Pittsburgh had the highest hub prices, the study found.
In the past several years, things have begun to change. Discount carriers with strong balance sheets have made inroads at many hubs. In response, incumbent airlines began cutting business-travel fares. For example, Delta Air Lines cut fares at its Cincinnati hub, AMR Corp.'s American Airlines cut fares in Miami and US Airways moved to quickly match Southwest Airlines pricing in Philadelphia.
Still, Bob Downey, who used to have the top frequent-flier status at US Airways, has switched loyalties. To fly to Pittsburgh two weeks ago, he happily drove two hours from his Albany, N.Y., home to catch a Southwest flight from Hartford - and save several hundred dollars.
"US Airways was an option, but it was twice the fare," said Mr. Downey, who owns his own medical-supply business.
One of the most drastic post-hub changes has been in the price of a Pittsburgh to Philadelphia flight. That route was priced at $680 round-trip when US Airways had a monopoly, encouraging many travelers to drive the five hours, instead. Then the price plunged to a maximum of $186 round-trip when Southwest began flying to Pittsburgh in May. Many more people now fly the route.
To keep up with the demand, US Airways now has a dozen daily flights in each direction between the two cities, up from eight in January. Southwest has six daily flights each way.The same is true for the Pittsburgh to Washington, D.C., market. The average fare in the first quarter of 2004 was $634 round-trip, according to DOT data. But Independence Air began flying the route in August 2004, and by the first quarter of 2005, the average fare had fallen to $326 round-trip, and the number of passengers more than doubled, according to the DOT.
In all, the average business-travel fare into and out of Pittsburgh was 19.1 percent lower in October than a year earlier, according to airfare-tracker Topaz International Ltd.
"The benefits of a hub come at a very high price," said Kent George, executive director of the Allegheny County Airport Authority. "Now we have the good old American free-market system responding to demand."
Lower fares - and the increased local traffic they have brought - have affected all parts of the airport. Car rentals are up 10 percent this year in Pittsburgh, the airport has had to add more parking, and Pittsburgh's massive airport mall has maintained 100 percent occupancy.
Still, there have been hassles for both travelers and the community. Pittsburgh has lost nonstop flights to 50 different cities, mostly small markets, as US Airways dropped to about 200 flights a day from a peak of more than 400.
The airport's total traffic, which peaked at more than 10 million passengers boarding planes in 1997, will only be about six million this year.
And the retrenchment has meant massive job losses at the airport, as employment at the airport has fallen to 3,500 from 11,500, George said.
To cope with the loss, the Pennsylvania Legislature pledged $150 million from gambling revenue over 10 years to pay for facilities such as gates that were abandoned by US Airways.
Part of that will cover the $7 million annual cost of operating a baggage system that US Airways stopped paying for in its bankruptcy reorganization.
The airport is finding it can run a lot more economically when it doesn't have to grapple with the inefficiencies of a hub - waves of planes coming in and leaving at the same time, followed by emptiness until the next wave.
Instead of doing maintenance on runways in the middle of the night, for example, airport officials now close one of their four runways during the day and get work done cheaper.
"Pittsburgh International Airport is going to survive without any problems," George said.
Fears have eased that the airport's in-terminal shopping mall would collapse.
Sales are down 10 percent from last year - not as bad as feared, according to Jay Kruisselbrink, vice president at BAA Pittsburgh Inc., the mall's developer and manager.
One saving grace for the mall is that passengers who begin and end trips in Pittsburgh actually shop longer and spend more than people rushing to make connections. The average sale has climbed to $12.05 from $8.30, George says
