After a year of stalled construction due to the pandemic, airlines have cleared for takeoff more spending on a Pittsburgh International Airport modernization project whose cost has jumped to nearly $1.4 billion, an increase of almost $300 million.
Carriers last week authorized $182 million in funding for site preparation work for the project, which includes the construction of a new terminal for ticketing, security and baggage claim.
The decision represents the resumption of construction after a yearlong delay caused by the COVID-19 pandemic, according to the Allegheny County Airport Authority, which oversees Pittsburgh International.
In announcing the authorization, the authority stated that the budget for the project is now set at $1.39 billion. That’s an increase of $290 million, or 26.4%, over the original estimate of $1.1 billion.
The authority attributed the increase to “design evolutions” authorized by the airlines and costs associated with the delay.
Airlines would shoulder the cost of the construction through rates and charges paid to the authority to operate at the Findlay airport, although there likely would be some federal or state funding involved.
Paul Hoback, the authority’s chief development officer, said he’s not expecting public funding to be significant.
“The airlines are the primary backers of the debt associated with this work,” he said.
The new spending has won the support of the airport’s two largest carriers, American and Southwest, as well as others.
“The PIT team has been a fantastic partner throughout this entire process,” Patrick Bowes, manager of corporate real estate for American and chair of the airport and airline affairs committee, said in a statement. “While we still need to finalize a long-term agreement, the fact that there is airline support of the terminal modernization program during what has been a very challenging time for our industry and the entire economy is a testament to the great work the team has done — and the merits of the project itself.”
“Southwest is in support of the next step towards the terminal modernization plan, and we are looking forward to working collaboratively with the Allegheny County Airport Authority to ensure a successful program,” added Brian Parrish, a Southwest spokesman.
All nine “signatory” airlines, meaning those that operate under an airport lease agreement, backed the new spending, Mr. Hoback said.
Besides American and Southwest, they are Delta, United, Spirit, Allegiant, JetBlue, Alaska and British Airways, which currently is not flying from the airport because of the pandemic.
The additional spending comes at a time when the airport is starting to show signs of life after watching traffic plummet to next to nothing because of COVID-19.
On March 11, 7,465 travelers passed through the airport’s security checkpoint. That’s the second-best total since March 15, 2020. The highest was Dec. 27, when 7,583 passengers cleared the checkpoint. On an average day pre-COVID, about 15,000 people went through security.
And last week, the airport experienced its busiest week since the pandemic started, with nearly 42,000 people passing through the checkpoint.
Though COVID-19 had held up construction, the carriers had authorized $150 million in design spending last year in approving a new two-year lease with the authority.
The new spending “officially clears the way for construction to begin on the first airport terminal in the U.S. to open post-pandemic, designed and constructed with the highest public health standards in mind,” authority CEO Christina Cassotis said in the airport’s Blue Sky newsletter.
With the authorization, the authority will be able to go ahead with contracts for structural steel and concrete decks, foundations and underground utilities this spring. Money also was allocated for additional design work and project management.
Furthermore, the authority last week gave the go-ahead to start work on more than $19 million in contracts related to early site preparation that had been scheduled to advance last April. The $19 million is included in the $182 million the airlines authorized.
With the new spending approved, site work should start as early as next month.
Fencing will be going up. Crews will be tearing up concrete on the west ramp between the airside building’s C and D concourses to make way for the new landside terminal, which will be tucked between those two arms.
Some of the new spending will be to erect the steel skeleton of the new building.
Nonetheless, the building envelope itself, interior construction, and roofing as well as other aspects of the modernization, including a 3,300-space parking garage and new roadways, are still contingent on the authority reaching a long-term lease deal with the airlines and floating the revenue bonds needed to pay for the project.
Mr. Hoback said the authority is hoping to have the new lease agreements in place sometime this summer. It then would work with the airlines on the right time to go to the bond market, perhaps as early as this fall.
“We acknowledge that there is still some work to do to get that long-term agreement in place,” he noted.
If all goes as planned, the authority hopes to conclude construction by mid-2024 and open the new terminal in early 2025.
Mr. Hoback said he is confident there will be no other increases in the $1.39 billion budget for the modernization.
The new terminal would replace the existing landside building, which would be demolished or repurposed. The airside building would continue to be used to get on and off planes. The tram that now takes travelers between the landside and airside buildings would be eliminated.
While some, like midfield terminal architect Tasso Katselas and former state Rep. Mike Turzai, have questioned the need for the project, Mr. Hoback said it will improve the experience for travelers and stabilize operations and maintenance costs.
The midfield terminal, a former hub for US Airways, was built for a different time, a different function and a different business model than today, he maintained.
“It’s always been about right sizing the airport,” he said of the new project.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
This story was updated at 5:50 p.m. on March 23.
First Published: March 23, 2021, 2:40 p.m.
