"Pittsburgh International Airport Prepares For Lease Talks"

Wednesday, April 2, 2003

Pittsburgh International Airport Prepares For Lease Talks
US Airways Opts To Strike New Deals
WTAE-TV, PA


PITTSBURGH -- If US Airways successfully negotiates for less-costly leases
at its local hub, officials said it will affect how Pittsburgh International
Airport makes payments on outstanding bonds. 

Bond holders who paid for the construction of the airport nearly 11 years
ago are owed about $675 million. They receive annual payments of about $62
million. 

About 85 percent of the payments come from US Airways' airport gate leases,
according to county records. In 2001, the company paid $60.5 million in
rental charges and $11.8 million in landing fees. 
 
If US Airways' payments decrease under a new lease, other airlines would
have to make up the difference or the airport will have to cut costs. 

If that fails, airport spokeswoman JoAnn Jenny said bond insurers will cover
the difference. 

"Worst case, even if US Airways left entirely, the bonds are insured and it
would not cost the taxpayers anything," county Chief Executive Jim Roddey
said Tuesday. "That said, if the insurers had to pick up that cost, it would
not be good for our bond rating." 

Companies that are reorganizing under Chapter 11 bankruptcy protection can
cancel leases, if they get Bankruptcy Court approval. 

Roddey said US Airways officials informed him on Monday, shortly before the
company emerged from Chapter 11, that they had decided to negotiate new
leases. 

Roddey said he was surprised because the airport gave the airline $28
million in cash givebacks over the last three years.


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dc/dcboard.php

*****************************************