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Allegheny County seeking CEO to lift Pittsburgh airport passenger count

| Wednesday, March 19, 2014, 11:21 p.m.
Justin Merriman | Tribune-Review
Pittsburgh averages 150 daily flights to 37 destinations, down from a peak of more than 600 flights to 110 destinations in the early 2000s.

How quickly things change.

Just 2½ years ago, many in the airline industry pointed to Pittsburgh International Airport as a model for weathering the industry's turbulent climate. Pittsburgh wooed low-cost airlines and developed sources of revenue once US Airways closed its hub and scrapped hundreds of daily flights.

“We've been watching everything that Pittsburgh does. It might help us,” Candace McGraw, a Penn Hills native who heads the Cincinnati/Northern Kentucky International Airport, told the Tribune-Review in late 2011. At the time, the Cincinnati airport was enduring the nation's worst passenger declines.

Today the Pittsburgh airport's longtime executive, Brad Penrod, is out of a job as the airport comes off a year when it posted the lowest passenger totals since moving to its current site 22 years ago. During the past year, Penrod was demoted and heavily scrutinized by Allegheny County Executive Rich Fitzgerald for not doing more to attract flights.

“The No. 1 or No. 2 issue I hear from constituents, particularly from people in business, is that there's not enough flights, and the frequency of flights” is not enough, said state Sen. Matt Smith, D-Mt. Lebanon, an Allegheny County Airport Authority board member.

Pittsburgh averages 150 daily flights to 37 destinations, down from a peak of more than 600 flights to 110 destinations in the early 2000s.

“I think there's a lot of positive things, particularly on the economic development front. That's a great aspect of the airport, but that doesn't lead to increased flights,” Smith said.

The authority board forced out Penrod, 53, of North Fayette on Friday. It's unclear whether he was fired or pressured to resign.

Penrod became CEO in 2007 after having worked in a number of operations roles since 1983, fresh out of college.

“I want someone who wakes up every day and that's what they worry about — adding flights at the airport. I want someone with dynamism, someone with charisma who can work with a lot of stakeholders at the federal and state level,” Fitzgerald, who took office in January 2012, reiterated this week.

The board demoted Penrod to president and chief strategy officer in February 2013 to pursue another CEO. The nine-member board oversees airport operations; the county executive appoints the board members.

Interim Executive Director James R. Gill, 46, of Moon, who was executive vice president, appears to speak Fitzgerald's language, though he did not say on Wednesday whether he is interested in the job.

“You'll continue to see us do things that we have been doing, but I recognize the fact that one of the things we have to do is provide the greatest amount of air service opportunities that we can,” Gill said. “We have to be more aggressive. That's what our stakeholders want.”

Fitzgerald and board members did not point to any one thing that cost Penrod his job.

“We put our search for a new CEO on hold for about a year. The board felt there was a need to move forward now,” said board treasurer Dennis Davin, who heads the county's Department of Economic Development.

Davin noted that the board delayed its CEO search to work on a $500 million natural gas drilling deal with Cecil-based Consol Energy Inc. and to try to preserve jobs threatened by the US Airways merger with American Airlines.

In January, the new American Airlines said it will close US Airways' $25 million flight operations center in Moon, costing the region 600 jobs.

Davin said the authority has interviewed no one for the top post and has no candidates in mind. It will conduct a national search.

Transportation and logistics consultant Satish Jindel, owner of Franklin Park-based SJ Consulting Group, said lowering airline fees would go a long way toward boosting the number of flights, helping more than hiring a CEO. A $50 million payment from Consol helped reduce airlines' average cost per passenger to $13.92 — but that cost still is nearly double the median for midsized airports of $7.76 per passenger, according to Moody's Investors Service.

Average per-passenger costs are $3.25 at Akron-Canton Airport, but it serves about one-third as many destinations.

“It all comes down to the bottom line, whether it's Spirit flying out of Latrobe, Southwest out of Akron or Allegiant out of Youngstown. It's about landing costs, and the board needs to focus on getting costs down,” Jindel said.

Spirit Airlines in 2010 negotiated a contract with Westmoreland County Airport Authority for service starting in 2011 at Arnold Palmer Regional Airport in Unity. The authority agreed to keep Spirit's costs low by employing up to 40 workers on the airline's behalf, for baggage handling and customer service, said Gabe Monzo, the authority's executive director.

Monzo could not provide per-passenger costs for the airport.

“I would have done almost anything to get them to come in here, because back then we had no passenger service,” he said, adding that the airline has had a $40 million economic impact on the region.

Akron-Canton spokeswoman Kristie VanAucken had nothing but praise for the Pittsburgh airport.

“Pittsburgh has exceptionally good air service for a midsized airport, especially when you consider there are only four major airlines left, and they have reduced the number of flights and hubs,” she said. “I'm not certain what else they could be doing. I don't know what stone they have left unturned.”

Tom Fontaine and Bobby Kerlik are Trib Total Media staff writers. Reach Fontaine at 412-320-7847 or tfontaine@tribweb.com and Kerlik at 412-320-7886 or bkerlik@tribweb.com.

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