Delta changes lease deal
Delta Air Lines will become the second major airline to cancel its long-term lease at Pittsburgh International Airport through a bankruptcy reorganization, effective Saturday.
Atlanta-based Delta obtained bankruptcy court approval to cancel its lease on Feb. 28, but has negotiated a new lease for less space with the Allegheny County Airport Authority, said airline spokeswoman Gina Laughlin.
US Airways was the first major airline to cancel long-term leases at the airport in early 2004 as part of its first of two recent bankruptcies.
"Delta identified Pittsburgh as an airport where we currently lease more space than is needed for our operation," Laughlin said. "This is the first step toward right-sizing our facilities at Pittsburgh."
The cancelation does not mean Delta plans to end service at Pittsburgh International. Delta is the third busiest airline at Pittsburgh International. More than 17,500 passengers boarded Delta jets to Atlanta, Cincinnati and New York in January -- the latest figures available -- up 3.8 percent from the 16,900 passengers in January 2005.
"A lease rejection does not signal any type of reduced operation," Laughlin said.
Authority officials and Delta have reached a new agreement that essentially would cut one gate, two ticket counters and a passengers club within the airport's terminals, said Eric Ruprecht, the authority's director of business administration and properties.
Delta hopes to get approval of the new deal from a bankruptcy court judge in New York at a hearing on Monday, Laughlin said. If approved, Delta would maintain two gates and two ticket counter spaces.
"It's just a way for us to ensure we've got the right space we need to meet our cost-reduction goals," she said.
Delta is attempting to slash $3 billion in expenses throughout the airline by 2007. Delta, which filed for bankruptcy on Sept. 14, has lost $12.8 billion since January 2001, the year the airline industry downturn started amid the terrorist attacks.
Delta is among 11 airlines at Pittsburgh International that signed long-term leases that last into 2018. Airlines have a choice of a long-term arrangement, by signing the Airport Operating Agreement and Terminal Building Lease, or month-to-month leases.
Airlines signing long-term deals get reduced rates for landing, ramp and terminal use, but are locked into making payments through May 2018, when the airport construction bonds are fully paid. Other airlines pay higher rates, but have no lengthy obligations.
Northwest Airlines, based in Minneapolis, also is in bankruptcy protection, but has not yet asked the authority to restructure its agreement.
