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AIRPORT PROFILES Last modified on May 17, 2016

Pride and prejudice

CEO, Christina Cassotis, talks to Joe Bates about the challenges and opportunities ahead as she bids to turnaround the fortunes of Pittsburgh International Airport.

It is all too easy to revert back the city’s boom years as a steel town or the airport’s “glory days” as a US Airways hub when thinking of Pittsburgh.

Yes, it was the home of the US steel industry and sure, as a US Airways hub up until 2004, Pittsburgh was a major player in the nation’s airport system, handling around 20 million passengers per annum on a regular basis.

But as many cities and airports have found, nothing lasts forever, and the demise of the steel industry followed by US Airways’ decision to pull the plug on its hub operation meant that like Cleveland Hopkins, Cincinnati/Northern Kentucky and Lambert/St Louis airports in the US and Brussels and Geneva in Europe, Pittsburgh International Airport had a huge void to fill.

Traffic plummeted from an all-time high of just under 21 million passengers in 1997 to 7.8mppa in 2013 and, to some extent, admits current Allegheny County Airport Authority CEO, Christina Cassotis, people were in denial about what had happened.

“For years people wanted to know when US Airways were coming back, and this kind of outlook really didn’t help as it prevented the airport and Pittsburgh from moving on and forging a new future for itself,” she says.

“So, one of the first things I did when I joined was make it absolutely clear from day one that the hub wasn’t coming back and it was time for a new philosophy and a new business plan to take the airport forward.

“I think that most people have now accepted this and this has allowed us to make some decisions about infrastructure and partner with local organisations to work together towards growing Pittsburgh as an O&D airport.”


New strategy

Cassotis has no doubt that the new focus of concentrating on nurturing and growing O&D traffic is the way forward, and believes that the launch of a number of new point-to-point services since her arrival 16 months ago proves that the new philosophy is right.

“I frequently say to people that the opposite of a hub is not, not a hub, it is an O&D market and we can be a good one and that is our future,” states Cassotis.

The new strategy, she says, involves partnering with the types of people and organisations that can help “facilitate inward investment in tourism”.

These include Visit Pittsburgh, the Pittsburgh Technology Council, Allegheny Conference on Community Development – comprising the region’s top 300 companies – and Allegheny County, which includes the City of Pittsburgh.

She also notes that the O&D traffic in Pittsburgh never went away and that it is simply the loss of the airport’s connecting passengers that caused the dramatic decline in throughput that saw PIT fall from being a top 30 US gateway to one just about in the top 50 in a few short years.

It was ranked as the nation’s 49th busiest airport for passenger traffic in 2014 and Cassotis insists that the only way forward for PIT is up as new routes and better facilities and services bring more visitors to the city.


Image and perceptions

Cassotis, who moved to Pittsburgh 16 months ago, is also honest enough to admit that there are a lot of misperceptions about the city, perhaps the most common one being that it is an aging steel town that had seen better days.

This, she is quick to point out, could not be further from the truth as the city has all but reinvented itself in recent years to emerge as a centre for technology, robotics, healthcare, finance, nuclear engineering and biomedical technology to name but a few industries.

Google, Bosch, Disney, Uber (driverless car testing), Intel and Yahoo are among 1,600 technology firms based in the area – Facebook recently announced plans to base its Oculus virtual reality centre in Pittsburgh – and the city is home to 68 colleges and universities that include R&D leaders Carnegie Mellon University and the University of Pittsburgh.

She adds that Pittsburgh also has a strong arts and culture offering, in part due to the generosity of its former steel magnets that left vast fortunes to be invested in the city.

Cassotis then reels off a string of attractions that, quite frankly, any city would be delighted to call their own. She also notes that Pittsburgh has its own world-renowned symphony orchestra, ballet theatre and opera.

“This is a fabulous city,” enthuses Cassotis. “The cost of living is low and you can have a fantastic quality of life here because the city has been cleaned up and turned around. You have this convergence of a lot of things going right at the right time.”

Zagat recently rated Pittsburgh as the best food city in North America and an increasing number of organisations are naming the city as one of the best places to live in the US and the world. 

“The people here are very proud of their city, and rightly so, so it was time to start telling the world about it and working with the city, tourism and business partners on developing a route development strategy that would act as a catalyst for the airport to grow once again.”


Route development 

Modest Cassotis attributes the airport’s air service development programme success over the past year to a concerted regional effort to attract new services and airlines.

As a legacy of its time as a US Airways hub, PIT will remain a fully residual airport until 2018 when it has to renegotiate its airline agreements, so in a bid to encourage traffic growth it restructured its rates and charges to encourage new entrants.

And the policy seems to have worked as four airlines (Allegiant, Sun Air Express, Porter Airlines and OneJet) launched services from PIT in 2015 and they will be joined by a fifth, Frontier, in June 2016. 

The recent additions and new services by existing carriers meant that 17 new non-stop routes were launched from PIT last year that included a new service to Billy Bishop Toronto City Airport by Porter Airlines, while Delta committed to direct daily flights to Paris-CDG for six months of the year.

Six of the new routes introduced in 2015 were to small regional markets, which Cassotis is quick to point out are important for people accessing Pittsburgh and for the city’s businesses to access the wider market.

In addition to the new routes, many of the airport’s incumbent carriers upgauged aircraft and frequencies on existing services. 

“The success of regional, domestic and international routes on a mix of carriers demonstrates our ongoing transition from a former mega-hub to a top origin-and-destination facility,” says Cassotis. 

“We are pleased to see carriers’ confidence in the Pittsburgh market and increasing community support for these new flights.”

What has been the secret of PIT’s success? “It’s been a team effort with a laser focus on meeting the needs of where the industry is today,” she says.

“We, of course, highlight the attributes of Pittsburgh, but in truth all the airlines want to know is why we are good for their network and not why is Pittsburgh great, right?

“We now have the people and organisations on-board who can tell them this and it is a good and powerful story.”

The current focus of her attention is the addition of a second daily non-stop service to the San Francisco Bay Area, which she believes is dramatically underserved, and a year-round service to Europe.

Excluding cross-border services to Canada, Cancún, Paris and a handful of routes to the Caribbean are PIT’s only international routes today and the days of daily British Airways flights to London seem a very long time ago now.


Traffic growth

As a result of new services, flights, seats and passenger numbers at Pittsburgh International Airport continue to move in an upward trajectory.

Indeed, Cassotis hails 2015 as being a “fantastic year” as the new non-stop services raised the number of destinations served non-stop from PIT to 54 and 8.1 million passengers (+1.6%) passed through the gateway.

“The increase is not huge, but it is for us as it shows that we are continuing to reverse the downward trend of recent years,” comments Cassotis, noting that it was the first time more than eight million passengers have used PIT since 2012.

“It also reflects the momentum that is going on in the greater regional community, which is one of transformation, revitalisation and resurgence,” she adds.

“Maybe the best way of saying it is that last year the airport got back into the game as a willing and able partner for regional growth and meeting the needs of the economy.”

Would she be so bold as to predict what PIT’s passenger numbers maybe five to ten years down the line if the current level of route development success continues?

“It is difficult to predict the future, but there is a framework that I can see for five to ten years out, so I’ll have a go,” she smiles. “Pittsburgh as a city and a region has gone from being dependent on one industry, steel, and one airline, US Airways, to diversifying the economy and diversifying the airline mix serving that economy.

“As a result, I predict that we will easily see non-stop, year-round, transatlantic services to Europe by one, if not two carriers, with seasonal fill-ins for some VFR [visiting family and friends] markets.

“I think five to ten years out we will also see the introduction of a Gulf carrier serving not only the Gulf region but India as well because there is a tremendous amount of growth going on at the moment with medical institutions in India and the number of students coming in.

“I expect all of this will lead to significant passenger growth and we will have the answers to the question about how best to develop our facility, bearing in mind that we were built as a connecting hub but now serve as an O&D market.”

Southwest is currently the biggest airline at PIT measured by destinations served and American Airlines is the largest in terms of passengers. 



Revenue streams

PIT enjoys a 58/42 split between aero and non-aeronautical revenues with car parking accounting for 51.5% of its income from non-aviation relation activities followed by rental car (20.6%) and F&B/retail (9.9%) Cassotis hopes that another source of non-aero revenue will join them later this year when CONSOL Energy Inc is finally expected to start flowing natural gas from thousands of feet below PIT.

The 9,000 acre airport site – the fourth largest in the US – sits on top of the Marcellus Shale and three years ago PIT agreed to let CONSOL drill for natural gas from 47 wells on six pads across its landmass.

PIT received an initial down payment of $46 million from CONSOL for the rights to drill for gas on airport land for the next 20 years and Cassotis hopes that the initiative will make the gateway significant income when the wells are turned on for the
first time later this year.


Existing facilities

Cassotis says that contrary to assumptions, the airport does utilise most of its existing facilities, although inevitably for a gateway built for 30mppa, some gates remain unused.

The airport’s X-shaped design features a central core that includes the recently revamped AirMall concessions area, connected to four concourses, which between them are equipped with 75 gates.

And with four runways the airport is certainly not in need of new infrastructure any time soon, however, Cassotis tells Airport World that this doesn’t mean sitting back and doing nothing for the next few years.

“We have some choices to make as the facilities are 24 years old now and we’ve got to really think about how to modernise them as we are way behind from a technology perspective and some customer service amenities need to be improved,” reveals Cassotis.

The airport is actually in the midst of updating its master plan, which Cassotis assures will address these issues as well as deciding the best way forward for PIT in terms of its over capacity and solving a couple of smaller problems.

“We were built for connecting traffic and so only have 1,100 covered car parking spaces and this is clearly not enough for an O&D airport in the Snowbelt,” she explains. 

“We also need to improve the operational efficiency of our Federal Inspection Services facility and our security checkpoints, which are too small and have insufficient capacity despite us having all this capacity airside. All this screams new master plan to me.”

The airport is just starting to talk to the airlines about possible options and she believes that late summer/early fall will be about the right time to open up discussions with the general public.



Customer service

Cassotis reveals that PIT scores relatively well for customer service in ACI’s annual Airport Service Quality (ASQ) customer service poll, passengers liking the gateway’s range of F&B and retail outlets, ease of navigation and non-crowded facilities.

According to Cassotis there is, however, room for improvement in its Wi-Fi speeds and security lanes, and these will be done, as she insists that the airport takes customer service very seriously.

Bringing in more local Pittsburgh concepts and passenger pleasing national and international brands was part of the recent $10 million revamp of the AirMall and has led to the airport earning a healthy $14.56 per enplaned passenger from concession sales in 2015. 

New terrazzo flooring that pays homage to Pittsburgh’s past has been installed at the head of all four concourses and is already beginning to win awards.

PIT is also working closely with Pittsburgh’s arts community to help ensure passengers enjoy a sense of place when in its facilities and, in a pioneering move last summer, became one of the first airports in the US to allow ride-sharing operators to make kerbside pick ups.

“This was a result of listening to our passengers and responding to their needs, as well as responding to the changing marketplace,” says Cassotis.

Such improvements and initiatives helped PIT earn a top 10 ranking for medium-sized airports in the recent JD Powers North America Airport Satisfaction Study. 

“We are working with all our partners on ways to make mprovements as we want people’s first impressions of the airport to be wow, I didn’t know that about Pittsburgh,” she enthuses.

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