US Airways’ argument has merit
The first impulse is to tell US Airways where to go. The second is to hold on for a minute.
US Airways is, after all, a private enterprise that’s been through a terrible bath and isn’t out yet. Arrayed against it in financial showdown are We the People, fronted by our politicians. In a contest of credibility, business people deserve at least as much as politicians.
The airline’s case is that its Pittsburgh hub is too expensive to operate as in the past. Debt payments on Pittsburgh International Airport alone are about $50 million a year for the airline. True, it agreed to that. But that was a lifetime ago in the flying business. Sept. 11, 2001, on top of a recession, broke all the rules, raised costs, and battered down air travel, a dog-eat-dog competition even in good times.
Keep in mind, the flawed airport deal that US Airways made years ago was made with us, the public. We won $1 billion in work for construction companies and unions, apparent (though illusory) job security for the thousands connected with the hub operations, and a world-class terminal. But also a high-fare, near-monopoly airline that couldn’t stand the cost pressures when the world turned upside down.
US Airways fell bankrupt. Shareholders lost everything, old executives are out, and a third of its Pittsburgh work force went unemployed. Meanwhile, maddeningly, two other hubs, in Charlotte, N.C., and Philadelphia, are cheaper to run.
What does this tell youâ¢ That US Airways, if we still want its service and its surviving jobs, has a case for lower costs in Pittsburgh. Including lower debt payments. If the airline leaves (and never mind the panic in its claims of $1.8 billion in regional economic losses), what thenâ¢ What new carrier is going to come in here at similarly ruinous costsâ¢ The politicians will have to offer bargains. So why shouldn’t US Airways get the same deal?
Certainly the bond payments must be made. If US Airways pays less, someone else pays more. (A sneaking suspicion, with Gov. Rendell at the table, is that it might be slot machine suckers.) What US Airways itself proposed, to an initial chorus of outrage, is raising three taxes on others.
But two of these ideas are not outrageous. Both would fall on travelers: a hotel tax and a car-rental tax. Pittsburghers pay these in distant cities. They do not make or break the decision to travel. The third idea, raising the sales tax, is a stinker. Allegheny County’s 7 percent is already high and falls mostly on the locals — us.
As to forcing US Airways to commit to certain union job levels, it is nonsense. The company could land in bankruptcy again. Try to collect on its pledges then. Job security for airline hands, as for others, is to be the low-cost, high-quality producer.
Let the politicians concentrate instead on bringing in competing airlines. No more sweetheart deals. No more monopolies. Enough overbuilding of hangars and terminals. Enough, even, of an authority-run airport. Privatization wouldn’t mess up worse.