A couple of days ago I wrote about how China Eastern will start flying to Pittsburgh… for a very limited time. Essentially the airport is trying to court more international airlines, and somehow they’ve talked China Eastern into operating two charter flights to Pittsburgh in August (in the original story I said it was just one roundtrip flight, which I inferred based on the way the press release was written, though as it turns out they’re operating two roundtrip flights).
Essentially China Eastern will operate roundtrip flights from Shanghai to Pittsburgh on August 3 and August 11, in hopes of encouraging American tourists to visit China, and in hopes of encouraging Chinese tourists to visit Pittsburgh. Really they’re hoping that they can fill these two flights, and that this might encourage a Chinese airline to start flying to Pittsburgh.
While it’s true that in the past the success of some charter flights has eventually led to scheduled commercial service, this was typically the case when we’re talking about full-on seasonal charters. In this case we’re just talking about two flights that are almost being used as a marketing campaign, and it seems unlikely to me that this would lead to a Chinese airline adding flights to Pittsburgh.
I was curious just how much this route is being subsidized, and the Pittsburgh Post-Gazette has some interesting data on that:
The flight won’t come cheaply. The airport authority is pitching in up to $560,000 to subsidize the flight. That amount is expected to drop as Pittsburgh travelers purchase tickets, authority spokesman Bob Kerlik said.
In addition, the VisitPittsburgh tourism agency is kicking in another $300,000, with another $50,000 coming from the Idea Foundry, a Pittsburgh-based nonprofit that works with Chinese families and students to encourage educational ties and investment.
So Pittsburgh is paying up to $910,000 for two roundtrip flights between Shanghai and Pittsburgh, which is a lot. In reality I suspect that $560,000 is essentially a revenue guarantee for the flights, and if the flights are full they probably won’t have to pay most of that.
But that still leaves a further $350,000, which is a lot of money for two roundtrip flights.
Pittsburgh Airport is no stranger to offering subsidies to airlines starting new service there. The airport authority is paying:
- Alaska Airlines $500,000 over two years to offer nonstop flights from Seattle this September
- WOW Air $800,000 over two years to offer flights from Reykjavik
- Condor $500,000 over two years to offer seasonal flights from Frankfurt
- Up to $1.5 million to Qatar Airways for their twice weekly cargo service from Doha
Airports offering incentives to new airlines is nothing new, and it largely makes sense. They realize it could take subsidies to convince an airline to fly somewhere, but if the route is successful they hope the airline will maintain it. Similarly, they hope that it will build momentum, and that more airlines will follow. So the subsidies for Alaska, WOW Air, and Condor, make sense in the grand scheme of things.
But paying $350,000-910,000 for two roundtrip flights to China seems a bit farfetched to me.
I’d certainly love to be wrong here, and if a Chinese airline announces service to Pittsburgh anytime soon I’ll gladly take this all back. But given that Pittsburgh is the 26th largest metropolitan area in the US, and the 48th busiest airport in the US, I can’t imagine it’s anywhere near the top of any Chinese carrier’s list. As a point of comparison, Philadelphia is the 8th largest metropolitan area in the US, the 19th busiest airport in the US, and an American Airlines hub, and their only nonstop flight to Asia is to Doha on Qatar Airways.
Anyone have a different take on this, and think a flight between Pittsburgh and Asia is in the cards?
I think you guys have valid reasons for your tax dollars being spent this way but my take on it was "OMG, China Eastern! Literally the WORST Asian airline out there, and I have flown them all." CE is so far down there and they are a Sky Team airline, which sucks since I like Delta. Once anyone flies them, they will never want to go to China again.
Three years ago, the "experts" said, Pittsburgh airport is dead after dehubbing and they best just forget growing service to more cities. That was when there were nonstops to 34 cities. Now there are nonstops to 74.
Three years ago, the Delta flight to Paris would be cancelled at any time and certainly no other airline would fly from Pittsburgh to Europe. Now there are three (Delta, WOW, Condor) and Delta just swapped the 757...
Three years ago, the "experts" said, Pittsburgh airport is dead after dehubbing and they best just forget growing service to more cities. That was when there were nonstops to 34 cities. Now there are nonstops to 74.
Three years ago, the Delta flight to Paris would be cancelled at any time and certainly no other airline would fly from Pittsburgh to Europe. Now there are three (Delta, WOW, Condor) and Delta just swapped the 757 for a 767.
And taxpayers do not pay the subsidies, but marcellus shale royalties from drilling on airport property do. If others do not like it, too bad. Christina Cassotis is a rock star.
Pittsburgh has struggled since USAir left, good for them for working hard to be relevant in air travel.
Pittsburgh International Airport has dozens of natural gas fracking wells on its property paying royalties of several million dollars annually, so there’s no taxpayer money involved in this or any of the other subsidies, so you can stop bellyaching on that aspect.
The wells have financed a reduction in arrivals and departure taxes, a number of high-end shops (that no one seems to use), a lounge, various facilities upgrades, and a beautiful floor in...
Pittsburgh International Airport has dozens of natural gas fracking wells on its property paying royalties of several million dollars annually, so there’s no taxpayer money involved in this or any of the other subsidies, so you can stop bellyaching on that aspect.
The wells have financed a reduction in arrivals and departure taxes, a number of high-end shops (that no one seems to use), a lounge, various facilities upgrades, and a beautiful floor in the center concourse. Not to mention there will be a $1 billion investment in a new airport replacing the current one which is scarcely 25 years old.
I'd like to see an article about how much other cities spend to subsidize flights. I know a fair number of US airports feel the need for international connections, and are willing to pay for those (e.g. Portland pays for direct flights to Japan and Europe), but I don't know the extent of those subsidies, and Pittsburgh is the first one I know of that's paying a domestic carrier for service.
The amount is not so high when comparing to subsidies to international flight from Chinese airport
@Matt,
Airport paid marketing campaign is also an incentive, otherwise airline have to pay for it in the USA. What would the tourism campaign say, if there are no flights so Shanghai, fly to Shanghai from JFK?
"So Pittsburgh is paying up to $910,000 for two roundtrip flights between Shanghai and Pittsburgh, which is a lot. In reality I suspect that $560,000 is essentially a revenue guarantee for the flights, and if the flights are full they probably won’t have to pay most of that."
Should have stuck with your second sentence. The $350,000 is a marketing campaign by tourism officials with or without these flights. Its no different than New Zealand...
"So Pittsburgh is paying up to $910,000 for two roundtrip flights between Shanghai and Pittsburgh, which is a lot. In reality I suspect that $560,000 is essentially a revenue guarantee for the flights, and if the flights are full they probably won’t have to pay most of that."
Should have stuck with your second sentence. The $350,000 is a marketing campaign by tourism officials with or without these flights. Its no different than New Zealand tourism bureaus doing a nationwide ad blitz across the entire US, even though Air New Zealand does not fly to Kansas City. So in this case it is not a subsidy to China Eastern. As to the last point, if flights are full, then yes they won't have to pay the full $560,000 but more importantly it will lead to more flights - which is the point. I believe the $560,000 would also cover more flights up to a year.
As mentioned in the blog, Pittsburgh has a history or route subsidies. Lets look at these. Delta to CDG began with a 2 year subsidy. It is now in its 10th year and has been upgraded to a 767-300. Condor Airlines had a two year subsidy to start service to FRA. It did so well in its first year that this year (its second) they doubled the amount of flights. That's double what the subsidy called for. WOW Air had a similar subsidy to start KEF, 4x weekly. They have added a fifth flight on their own, again beyond what the subsidy called for. My point is it seems like PIT really does their homework on these things and so far they have hit home runs. Will that be the case here? Who knows but I'm willing to give them the benefit of the doubt.
There are whole lot more Asian folks in Philly/suburban Philly. Does not make sense for MU to make it permanent.
This flight and the Alaska flight to SEA are all about Amazon HQ2.
Pittsburgh is still in the running for Amazon's HQ2. Amazon specifically said they want a good airport. This might be related window dressing.
This whole story is clearly fake news. We know that the US aviation industry is completely subsidy-free (because the US3 have told us), so no way has a US airport offered this cash. It’s clearly utterly absurd.
Unless it’s those damn commies flooding the US market with their subsidised planes, damnit.
Who wants to go to China anyway?
Or Pittsburgh for that matter.
Christina Cassotis has done a fantastic job of getting more flights to and from Pittsburgh focusing on O & D. As she says the airlines are not gonna come just because you are nice. Not only have they subsidized some routes but are also trying different things such as One Jet for direct flights to mid markets for the business traveler and being a sort of regional hub for smaller airports with Southern Airways Express....
Christina Cassotis has done a fantastic job of getting more flights to and from Pittsburgh focusing on O & D. As she says the airlines are not gonna come just because you are nice. Not only have they subsidized some routes but are also trying different things such as One Jet for direct flights to mid markets for the business traveler and being a sort of regional hub for smaller airports with Southern Airways Express. I give Pittsburgh credit for trying and am glad to see my old hometown airport doing a lot better. I do see why the cost of the China Eastern flights is excessive. Some of the stuff they try will work and some of it wont, but it's important they try and think outside the box some.
Just speculation here, but Philadelphia isn’t known to be the best airport. If Pittsburgh can capitalize on the non-friendly press/attitude towards Philly, maybe they’re hoping to get some lasting growth.
Antonio, you sound like fun.
Antonio, how much did you pay to read this blog?
PHL used to have 2 to Asia - DOH+TLV, but since AA chose to use the lamest excuse on earth (“somewhere else better to use the plane”), PHL now only has one, despite AA loyalists constantly hyping up why JAL should fly NRT-PHL starting yesterday
Your personal money and city tax dollars subsidizing a State human rights abuser. Enjoy!
Bye Antonio, this blog will be sad to see a person with your maturity and wisdom leave...NOT! If you don't like the headline, don't click on it. Nobody's forcing you to read every post. Readers like you and me are easily replaceable, if not us, someone else will be reading the blog anyway.
I pretty much avoid reading the other major blog out there...the thought leader, because of the asinine headlines and desperately obvious attempts to be provocative to get clicks. A pathetic waste of time 99% that blog. I still read this one despite its mammoth size because it still largely avoids stupidity and has generally useful stuff. One more stupid, click bait nonsense, spam website type headline like this though, and I am done reading this blog.
Remember the bridge to nowhere in Alaska? Not sure which was the bigger folly. Government waste at its best
This flight can work if PIT and China Eastern market the flight not towards only O&D US-China pax but also to other Asian travel-centric groups. For example, South Asians love any one-stop to India/Ban/Pak and Filipinos love any one-stop option to the Philippines. I can see people flying PIT-PVG-DAC, PIT-PVG-DEL, PIT-PVG-MNL
Since China Eastern is "state run" they don't necessarily need to keep this route profitable, but in any event that US-China relations sour (re:...
This flight can work if PIT and China Eastern market the flight not towards only O&D US-China pax but also to other Asian travel-centric groups. For example, South Asians love any one-stop to India/Ban/Pak and Filipinos love any one-stop option to the Philippines. I can see people flying PIT-PVG-DAC, PIT-PVG-DEL, PIT-PVG-MNL
Since China Eastern is "state run" they don't necessarily need to keep this route profitable, but in any event that US-China relations sour (re: impending drama regarding trade & N. Korea), PIT will probably be the first route to be cut since it's not to a key Asian getaway market like LA, NY, SFO, SEA, BOS etc.
When I spoke with Michelle she said the seats were selling like hotcakes. This could make a bigger splash this summer than the Air Saint-Pierre flights to Paris. Odd route lovers rejoice!
This is outrageous!
"Philadelphia is the 8th largest metropolitan area in the US, the 19th busiest airport in the US, and an American Airlines hub, and their only nonstop flight to Asia is to Doha on Qatar Airways."
FWIW an Air China delegation has visited Philadelphia twice in the past few months.
Carnegie-Mellon University. I doubt there's much more reason behind wanting these flights to China apart from CMU.
(Apart from a furry convention in July, of course.)