Pittsburgh Airport Ready for More

PITTSBURGH'S new Midfield Terminal, which opened this month, represents a bold move to become a significant international hub.

It is the most important expansion in United States airport capacity since the 1974 opening of the Dallas-Fort Worth airport. By one estimate, today's passenger traffic nationally will nearly double by 2003 from last year's 17 million passengers.

Though it will have an economic impact on the region, the project is not a guaranteed success. A major factor will be the performance of its hub airline, USAir. "Now more than ever it becomes the critical factor," says Andy Goetz, professor with the Center for Transportation Studies at the University of Denver.

"The financial strength of the hub airline is critical to the success of its hub airport," adds Spencer Dickerson, executive vice president of the American Association of Airport Executives. "If USAir went out of business, Pittsburgh would have some problems."

This recession has been terrible for US airlines. Air-fare wars have slashed profits. Airlines are drowning in red ink. USAir lost more than $700 million over the past two years. Its efforts to cut machinists' pay sparked a week-long strike that ended Oct. 10. The union accepted a one-year 3.5 percent pay cut in exchange for job-protection guarantees.

Analysts say the airline, the nation's sixth-largest, will need to keep growing to survive long term.

One great boost would be USAir's proposed alliance with British Air, says David Pizzimenti, airline analyst with Nomura Research Institute. If the deal receives federal approval, both airlines would strengthen their accounting books and their route structures.

Typically, a strong hub must be an endpoint for at least a quarter to a third of its passengers, Mr. Dickerson says. When the home cities are not popular final destinations, airlines pull out.

The classic case is Kansas City's airport, which never reached its potential after TWA shifted its base of operations to St. Louis in the late 1970s.

Pittsburgh is better off. USAir accounts for some 80 percent of the airport's passengers. More than a third of them start and end their trips in Pittsburgh.

Technically speaking, the project is not a new airport or a new terminal. It's two new terminals that use Pittsburgh's existing runways. The X-shaped terminal is close to the runways, saving up to $12 million in airline fuel because of shorter taxiing times. Pittsburgh's gate capacity is expanded to 75. An underground people-mover shuttles passengers between terminals.

Throughout the 1980s, airport investment such as Pittsburgh's looked like a sure-fire winner. Air-traffic grew briskly. Airports were strained to capacity. Experts warned the US was running out of airport space. Now those calculations have changed. Instead of a crunch, airport capacity looks adequate. The Federal Aviation Administration (FAA) has trimmed back its traffic projections and says growth will average below 2 percent a year through the year 2003.

"It's given us a real breather," says Jim McMahon, the FAA's manager of airport-capacity planning. "Given the lead times that you have for building airports and runways, it's not unusual that things come on line when you least need them."

John Nelson, director of the Center for Urban and Economic Research at the University of Louisville, still thinks airport expansion is a good long-term investment. It creates jobs and spurs development. Most of the money comes from the federal government and the state, not the community. "No community is growing without a proper infrastructure in place," he says.

Local observers agree. "Its success isn't guaranteed," says Stuart Hoffman, chief economist of PNC Financial Corporation here in Pittsburgh. But "we're confident."