Pittsburgh International Airport’s terminal modernization plans got a vote of confidence recently with a newly signed operating agreement that keeps the project moving in the midst of the pandemic.
The agreement between the airport and the airlines serving it became effective at the end of November and authorizes $150 million to finish the design of PIT’s Terminal Modernization Program, a major step in the project.
The Airline Operating Agreement, or AOA, runs through 2021, committing the airlines to cover the airport’s operating costs. In exchange, the airport agrees to use airport-generated revenue such as parking and concession funds toward lowering airline rates.
PIT does not receive any local tax dollars. The airport’s annual budget and terminal project is funded through airline rates and charges along with other airport-generated revenue.
“We are excited to reach a mutual agreement to complete the design of the Terminal Modernization Program,” said Patrick Bowes, manager of corporate real estate for American Airlines and chair of PIT’s Airport/Airline Committee.
“We appreciate the great partnership we have with the Allegheny County Airport Authority, PIT and the entire Pittsburgh region, and we look forward to continuing to find ways to increase efficiency and enhance the customer experience at PIT as we begin to recover from COVID-19. We believe the rationale for the Terminal Modernization Program still makes sense, and we’re committed to working with the airport to carefully study the project given how the world has changed in the past year.”
Construction had been scheduled to start this past summer on the billion-dollar project before the COVID-19 pandemic roiled the industry. Officials paused the start of construction but kept the design work moving over the past nine months, while working with airline partners on a new agreement.
“The pandemic has crystalized the importance of this project for the airport and the region,” said Eric Sprys, Executive Vice President and Chief Financial Officer, who negotiated the agreement with the airlines. “The project stabilizes rates for our airline partners into the future while modernizing the airport to meet the needs of today’s Pittsburgh market.”
Sprys said the airport and the airlines would continue to work in the new year on a longer-term agreement for TMP construction.
“This is a large step in the right direction,” he said. “If we would have stopped midway through design, we would have lost the design teams. It made so much sense to continue.”
PIT officials used the delay in construction to study new health recommendations and how to incorporate those into the design of the project. PIT could be the first terminal to open in a post-pandemic world with a focus on public health incorporated into its design.
“Despite never-before-seen challenges to our industry, the TMP has continued to move forward thanks to the incredible efforts of airport staff, design team and our airline partners,” said Paul Hoback, Chief Development Officer. “We remain committed to advancing innovation and building Pittsburgh’s airport for future generation and for the continued advancement of our region.”