U Signs Lease For 10 Pit Gates

[funguy2]

U accepted 10 gates and committed to those 2018 . Other airport facilities leased for three years but either party can terminate this after 12 months.. The other 40 gates are still being operated by U at a Premium lease 20% higher. If U does not negotiate to commit to those gates, or some part of, in the very near future, Pittsburgh will agressively look for another carrier to come in and take those gates. Once they have the carrier(s) to commit, those gates, USAirways will lose the option to operate them after the September extention.

The upside is that if UAIR decides it can operate the hub on 30 total gates (10 commited 'til 2018 and 20 month-to-month), it can give ACAA 30-days-notice and drop the "extra" 10 gates. This gives UAIR incredible flexibility to:
1) determine the size of the hub they want to operate at PIT
2) pay for only the facilities they intend to use (even if at a premium).

Consider this... What if UAIR can park CRJ-700's and EMB's 3 aircraft on every 2 gates? Then, if MDA and Express focused on PIT, UAIR could operate the same number of flights on less gates. Like I said, incredible flexibility.

Since the EMB's are coming, and largely replacing mainline at PIT, I would expect something like this to happen, in light of this new agreement.

You seem pretty confident that they haven't negotiated something else? Also, why would just one airline be involved? There is plenty of room for more, and it just means more competition and lower prices for PIT customers. It appears to me that either UAIR management has no idea what they want to do in PIT, or, they have a plan and it doesn't include a major mainline hub in PIT. Knowing this team it's probably the former.

If I recall... there were a few (5 or 6 maybe?) of gates on the D Concourse for an airline to start service and/or expand yesterday. I don't think this announcement is indicative of ACAA talking with anybody. UAIR did not say they were returning any gates immediately, but rather they worked out an agreement about what they have... Also, America West, AirTran, ATA, Midwest, Vanguard have all started (and some ended) service at PIT... Doesn't seem like getting a gate is a problem to me.

 

[USA320Pilot]

Funguy2:

Your point is well taken. There are gates currently available in the A, B, and E Concourses. In fact, the ACAA has talked about temporarily closing the E Concourse to save money.

If US Airways rejects its 40 non-signatory gates, the remaining tenants and potential new airlines would see even higher operating costs in a market with poor O&D traffic.

Regards,

Chip

 

[AOG-N-IT]

This I think is mostly good news. But only one move in an ongoing chess game. US Airways is behaving like any corporation faced with massive fiscal problems. They are trying to get the best deal they can with the least commitment possible.

Just like when you by a car, you try to get the most car for the shortest term and cheapest payment. As a consumer do you really care deep down about the ethics or reasons behind the 36 mo, 0% finance deal? No you just want the deal.

When viewed in that light it is mostly a good thing as it leaves plenty of "Wiggle" room for both parties.

Piney,

I see it exactly that way too !!! When your arse is in the wringer like ours is...seeking the best deal and building in "wiggle-room" is the only logical approach to take.

I see U being in a nice position from a business standpoint on this....but I have lingering fears for what the future might bring for the employees and the ACAA itself in the not so long term?

Ill befalling PIT in any manner is going to send a "Shock-Wave" through the entire USAirways system. I have heard many less intelligent people mutter things like..."Oh well...if PIT goes? we'll still be here" Not all together or even half true !!

PIT failing in any capacity as a mainline hub or a maintenance base will displace countless people via senority rights issues alone. Then comes added measures of consolidation or out-right abolishment of positions. This would only be compounded , If and when?? Siegel and crew gets only part of what they are seeking at present. (Airbus Outsourcing and GSE Station closures) for a few present examples we have pending.

Chip is also spot on this time regarding what could happen regarding the Simulators , Training facilities , RIDC Park and possibly the GreenTree Res Center. My point is this....if PIT catches a cold , many others elsewhere will be catching it too. You can bank on those "Economy of Scale" Facts !!!

 

[delldude]

Come on people look at the bright side and sing a song!

I'm so glad
I'm so glad
I'm glad, I'm glad, I'm glad
I'm so glad
I'm so glad
I'm glad, I'm glad, I'm glad


Sorry, Deep Purple

cream my friend.....

 

[ClueByFour]

If US Airways rejects its 40 non-signatory gates, the remaining tenants and potential new airlines would see even higher operating costs in a market with poor O&D traffic.

Guess that does not bode well for CLT, as PIT still has better O&D numbers.

Moreover, you will note that no other airline at the airport complains about the costs of doing business--I personally know that AA and HP have added flights of late.

Of course, US can (and does) pass the costs of "operating" at PIT onto the customer in the form of ticket prices, and averages that across their entire system, which is the crux of what makes the PIT problem a "US Airways subsidy request" and nothing more.

BNA has an expensive airport when AA left. So was RDU. I'd give important body parts for a similar situation to either of those airports at this point, if I was still living in PIT.

 

[blueoceans]

"Guess that does not bode well for CLT, as PIT still has better O&D numbers."

Except for the fact that Charlotte's population is expected to continue to grow substantially every year for the next 10 years (according to the U.S. Census Bureau.) They forecast Pittsburgh's population to continue to decline for at least the next ten years.

 

[AOG-N-IT]

"Guess that does not bode well for CLT, as PIT still has better O&D numbers."

Except for the fact that Charlotte's population is expected to continue to grow substantially every year for the next 10 years (according to the U.S. Census Bureau.) They forecast Pittsburgh's population to continue to decline for at least the next ten years.

Least we forget that U and CLT have no money concerns what so ever at this point..or even projectively....CLT doesn't play that game...and won't based on U's actions to date. They didn't over extend with a winning home team like PI or even EA to a lessor degree before that....why would they let themselves be taken in by Siegel? Jerry Orr and Our civic leaders are far too savvy for that.

CLT was built on a pay as you go basis...not leveraged to the gills in 2004 based on 1980's projections of a County or Corporate leader that wouldn't be around to see it through ( Colodny for PITbulls benefit)

Should U fail in the near future?? The CLT hub would be far more desireable for another carrier t come in for any number of reasons Vs. PIT....cost and location Vs. the next guys hub just for starters.

The Lufthansa's return to CLT from MUC was based on one major factor...a growing southern base , a business/banking relationship with Germany....and it's a natural inlet/outlet with the benefits of avoiding massive congestion in ATL.

 

[Beckles]

Pittsburgh will agressively look for another carrier to come in and take those gates. Once they have the carrier(s) to commit, those gates, USAirways will lose the option to operate them after the September extention.

*LMAO*

You think they're going to find any combination of carriers to lease 40 gates anytime in the near future? Aren't there already a bunch of empty gates to begin with?

 

[burghlaw1]

Before knocking Pittsburgh, you should understand a little bit of history. In 1981, U expanded at the old terminal adding nearly 25 gates. Within a couple of years, U had nearly 3/4 of the gate space at the old airport, and was busting out of it. Because of the location of the old terminal, there was nowhere to add on so that U could "pay as you go." The new facility was necessary. Second, when the airport was built; it was not overbuilt. All of the gate space was utilized. PIT was, at the time, U's busiest hub and U utilized all of its space here until September 2001. Comparing CLT's expansion to PIT is comparing apples to oranges.

The fact of the matter is that we are in the position we are in not because we built a white elephant; but that the facility was built at a time when airline growth was virtually assured, and when U was growing. Since 2001, U has shrunk and still is, sorry to say, not a competitive threat to anyone. I don't begrudge U attempting to negotiate with PIT to reduce its costs. But U has bigger problems than just PIT. That having been said, there is little economic incentive to negotiate when the contracts again might be abrogated in bankruptcy court. And with U sounding the alarms about its own survival, government officials must be concerned about pissing money on a carrier not likely to survive. The idea that PIT refuses to negotiate or deal with U because it's "full of outsiders" is comical. I recall as recently as three years ago the government funding the construction of new maintenance facilities for U. Trying to blame PIT or PA government for U's mess serves no purpose, and certainly doesn't solve these problems.

FWIW, what is happening in PIT is likely to happen in CLT (and I guess PHL) if U should ultimately liquidate. Ask yourself--what legacy airline is likely to expend a significant chunk of change right now to establish a hub whether it be in PIT, PHL or CLT. Maybe one day, when the airlines get their costs in order and their revenues improve, then they will look for that type of significant growth. If the air system returns to where it was in the summer of 2000 (i.e, filled to capacity) then vacant airports will once again look attractive. But I don't think it will happen for awhile. In the meantime, you can hope for LCC's to fill part of the gap; but no LCC will ever have as big a presence as U now has at any of its hubs.

 

[AOG-N-IT]

Piney Bob,

I believe you have seen what I was saying in the way it was intended.

CLT is in a very progessive mode...and has been since I arrived in my youth from LAX in the summer of 1969. A tale of two people...Neil Armstrong landed on the moon in July of 69...and I landed in CLT (LOL) Thanks Dad !!

CLT as a city is not without it's faults. CLT suffers from un-bridled growth...and far too much influence from land developers , whom do not operate in conjunction with those doing the road planning...or lack there of.

Many road projects I've witnessed are short sighted ..and all too often near obsolete before the project is even finished. Yet the Airport iself is a shinnng example of what planned projected growth and development should be.

I'm very much a fan of our airport manager Jerry Orr....yet the true credit for todays airport development goes to R.C. (Josh) Birmingham and the county commission of that era....thankfully that mindset has carried forward in this respect.

CLT has made it's mistakes , just like AC and PIT has. We are building a downtown basketball arena at tax payers expense that the voters clearly opposed. This is something that we wouldn't do for the former Charlotte Hornets based mainly on the reputation of it's owner George Shinn..hince they departed to MSY...an admitted mistake on Shinns part in hindsight. However our City Council and County Commision did overide the will of the people..in what I hope will be a good long range choice....one that PIT Politico's tend to catch hell for at times in regards to their sports facility ventures.

We now have the Charlotte Bobcats on line in 2005 under the ownership of former BET owner and USAir BOD member Robert Johnson. We also have a fine NFL franchise on the verge of greater things too...in a stadium financed by the permanent seat holders , not City/County funding via taxes. See them in STL saturday

CLT is still many years away from Major League baseball....and that's just got to be OK...but when you look at the Pirates results over the last few years in relation to performance and attendance , maybe baseball needs to remain on the back burner for CLT ?

BY and large...I found things to love and admire about both PIT and western PA. as a whole...but if I were betting my money on where the growth and greater potential and flexability would thrive? CLT would be the winner in many ways beyond the airport and USAirways...but CLT would not be what it is today by half , if it were not for that HUB to begin with.

CLT is also the major area in which the largest in attendance and money generating sport in America makes it's year around residence...and that would be NASCAR.

Daytona Fl. may have the Headquarters of the sport....but all the teams with only two or three exceptions out of 80+ are based here. The money from that would have USAirways execs killing themselves if they were only smarter about using the link as PI did in the 80's...but this is what happens when short-sighted Rail-Road stock holders see a profit and run deal they can't pass up. Hince the US takeover of PI...instead of the other way around as it should have been....but that's water under the bridge as they say....or to say it better Opprotunity and Paradise Lost !!