Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Qatar Flights Cost Airport Authority $1.48 Million Goals for Hauling Cargo Were Never Achieved

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Qatar Flights Cost Airport Authority $1.48 Million Goals for Hauling Cargo Were Never Achieved

Article excerpt

Qatar Airways has been paid $1.48 million in subsidies after its twice-weekly cargo flights from Pittsburgh International Airport failed to generate anywhere near the volume needed to avoid the payments.

The $1.48 million is the maximum the Allegheny County Airport Authority was required to shell out under a one-year agreement with Qatar that ended last month.

Under the deal, the authority was obligated to pay the airline a guaranteed "support fee" of $15,500 a flight - or a total of $744,000 - for the first six months of the service.

The payments were required regardless of whether Qatar met the goal of 60 tons of cargo - imports and exports - per flight, as outlined in the agreement.

During the second half of the year, the support fee would have decreased "based on calculations agreed to by the parties" if the 60-ton goal per flight was met. But that never happened.

As a result, the authority handed over another $744,000.

In fact, Qatar never came close to producing the 480 tons of cargo, on average, needed monthly to avoid the subsidies.

The closest the airline came was last month when it hauled about 180 tons of cargo to and from Pittsburgh. That was due in large part to a local retailer that shipped more than 100 tons of clothing on one of the flights, according to an authority blog post regarding the Qatar service.

Before that, the biggest month was October 2017, when Qatar carried nearly 163 tons.

Since May, the carrier has struggled to hit 100 tons for a month. Until last month's burst, cargo totals had plummeted from 99 tons in June to about 61 in September.

The slump came even after Qatar rerouted its flights through Chicago instead of Atlanta in an apparent effort to drum up more business. The service also goes through Luxembourg and Doha, Qatar's capital.

Despite failing to meet the goals, Qatar has continued the twice-weekly cargo flights this month, authority spokesman Bob Kerlik said.

It is doing so at this point without any additional subsidies. That potentially could change if another deal is reached between Qatar and the authority.

"The flight is continuing and we're talking with them about what, if any, contractual relationship would exist moving forward," Mr. Kerlik said.

In a statement, Christina Cassotis, the authority's CEO, described Qatar as a "good partner."

"Sure, we'd like to see even more local companies take advantage of the flights, but we know we're not going to become JFK overnight," she said, referring to John F. Kennedy International Airport in New York.

"We have a long-term goal of becoming a regional logistics center that, coupled with our real estate development options, has the potential to be an economic driver for the region. …

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