Pittsburgh Looks for Three-Fold Return on China Charter

A $1 million investment to bring Chinese tourists to the region could deliver $3.5 million in economic impact

By Bob Kerlik

Published August 2, 2018

Read Time: 3 mins


China is coming to the Burgh.

On Aug. 3, the first of four charter flights on China Eastern Airlines – two arriving and two departing – lands at Pittsburgh International Airport, opening a new relationship that local sponsors hope will generate millions of dollars in tourism and related economic development for the region.

Three Pittsburgh organizations – including the airport – have invested more than $900,000 to establish the first-ever nonstop commercial flights between China and Pennsylvania.

That kind of money makes some nervous, but engaging with China is exactly what U.S. markets should be doing, according to one aviation business expert.

“This is a great initiative. If you can open the Chinese market to Pittsburgh, that’s big,” said Bijan Vasigh, professor of economics and finance at Embry-Riddle Aeronautical University in Daytona Beach, Fla. “People think of subsidies as a transfer of money. They should consider it an investment. You will see the return in passengers, as long as the tourists arrive and start spending money – renting cars, eating at restaurants, buying things at the airport.

“China will be the biggest air transport market in the world. They have 1.2 billion people,” he added. Vasigh pointed out that Chinese tourists have a track record of spending big when they arrive.

“You can buy name-brand items in China, but in China it’s very expensive,” Vasigh said. “I’ve seen passengers come from China with six or seven suitcases.”

According to Brand USA Research and McKinsey Consulting, the average spend per person per trip to the U.S. is $7,500. Double the level from 2010, this makes Chinese visitors the highest-spending group per person per trip to the U.S.

In addition to the Chinese tourism impact, Allegheny County Airport Authority CEO Christina Cassotis said the move to bring Chinese flights to Pittsburgh is a step toward eventual scheduled service, which would be a huge benefit for the region’s businesses.

“This is huge step forward for the future, particularly for nonstop air service to China. The charter-to-scheduled service model has been successfully adopted in other parts of the world,” Cassotis said. “We are the first U.S. market to tap into China’s fast-growing tourism market with this type of business model.”

The coalition of VisitPittsburgh, Idea Foundry and the airport announced plans last month for the four flights. Officials signed a deal with the Chinese travel firm Caissa Touristic to market and sell the flights to tourists in China.

VisitPittsburgh is working with Caissa to book hundreds of Chinese tourists at hotels, restaurants and local attractions.

“These flights are no small feat. They open brand-new markets that we would never have direct access to,” VisitPittsburgh CEO Craig Davis said. “This is a first for a region of this size.”

The three organizations contributed $910,000 to the effort: $300,000 from VisitPittsburgh, $50,000 from IdeaFoundry and $560,000 from the Allegheny County Airport Authority.

The two round-trip flights will bring an economic impact to the region of just under $3.5 million, according to an airport-commissioned economic impact study by Boston-based EDR Group. As more tickets are sold, the financial commitment from the organizations decreases, airport officials said.

The flights arrive and depart from Pittsburgh on Aug. 3 and Aug. 11 on a Boeing 777-300ER, which carries 316 seats in a three-class configuration.

Anyone is eligible to buy tickets, including Pittsburghers looking to travel to China for business or leisure.

When Rachel Wang of Sewickley heard about the nonstop flights between Shanghai and Pittsburgh, she started making plans to visit her mother and sister in China.

“Since we had the (nonstop) flight, it encouraged me to book it. This is really a great thing for the community,” said Wang, 50. “I’ve been in Pittsburgh for 24 years and this is the first time I can fly directly.”

Pittsburgh-based businesses have taken notice and have been supportive, Cassotis said, as well as local universities that have large Chinese student populations, such as Carnegie Mellon University and the University of Pittsburgh.

UPMC, the region’s largest employer, applauded the airport’s effort to gain nonstop air access to China, a key growth market for the health system.

“By helping our partners in China deliver world-class care closer to patients and their families, UPMC at the same time generates revenues that we re-invest in our healthcare and research mission in western Pennsylvania,” said Chuck Bogosta, president of UPMC International. “Increasing convenient travel options between Pittsburgh and China is critical to these efforts and ultimately supports economic development in this region.”

Regardless of the economic impact, a nonstop flight means a quicker way to do business or see loved ones for people like Wang.

“If you’re not flying (nonstop), you have layovers and there could be bad weather, delays – anything can happen,” Wang said. “I hope next year it goes to three weeks or four weeks or every other week. It makes it so much easier.”

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