PITTSBURGH Airport debt weighs heavily

A sale or state takeover are among the options for Pittsburgh International.
PITTSBURGH (AP) -- US Airways may have rejected contracts and leases with Pittsburgh International Airport, but the airport's bills still have to be paid.
The question is, who will pay them?
In order to repay the bondholders who put up more than $1 billion for the award-winning facility, the Allegheny County Airport Authority may have to ask the state to float bonds, cut costs dramatically or even put the airport up for sale.
The state could float enough bonds to pay off the remaining $673 million debt at Pittsburgh International, as well as debt at Philadelphia International Airport. Pittsburgh could raise parking and rental car fees and close terminal space to cut costs. Or, if all else fails, Pittsburgh could sell its airport to a private buyer.
"It would be unprecedented in recent history or on a scale this large," Kurt Forsgren, a director of Standard & amp; Poor's in San Francisco, told the Pittsburgh Tribune-Review.
The airport floated the bonds to pay for a new passenger terminal and to make other airport improvements in the 1990s at the request of US Airways. But in declining to renew contracts with the airport, the airline cited high costs for operating in Pittsburgh.
'Disingenuous'
"For US Airways to say this is a high-cost facility is disingenuous when the airport is what it is because US Airways asked for this years ago," Forsgren said.
Pittsburgh's operating costs, including annual debt payments, were $7.57 a passenger last year, according to the Federal Aviation Administration and the Airports Council International-North America.
The cost is higher than US Airways' two bigger hubs. Philadelphia International is $5.69 a passenger and Charlotte-Douglas International in North Carolina is $3.51.
"Airlines are notoriously cheap, and any time airports want to pass costs onto the airlines, they yell and scream," said Jim Peters, an FAA spokesman.
Contract talks
In the meantime, local and state officials are expected to meet with US Airways to start negotiating new contracts. US Airways controls over 80 percent of Pittsburgh International's passenger traffic and employs almost 9,000 workers in the region -- making it the largest private employer in the area, according to local officials.
The airline is demanding $155 million in airport improvements or it might not base its MidAtlantic Airways regional jet subsidiary at Pittsburgh.
Should talks collapse before the Jan. 4 deadline arrives, Pittsburgh International would likely default on its loans and send the airport authority's debt rating into junk status.
"There have been no defaults on this magnitude at an airport," Forsgren said. "It would certainly send a shock wave through the whole airport system."