"Don't work out" != "stuck with the tab", but PIT comes close to that standard:
The airport underwent a massive $1 billion rebuilding and expansion which was completed in 1992 and became a major hub for US Airways. The new airport was one of the most innovative in the world, dubbed the "airport of the future" by the New York Times, and helped to pioneer modern airport design with its X-shape to reduce distance between gates, underground tram to transport passengers around the airport, and array of shopping options, all of which were cutting-edge at the time. Traffic peaked at 20 million passengers in the late 1990s, but US Airways, which was facing bankruptcy, abandoned it as a hub in 2004, eliminating thousands of jobs and nearly bankrupting the airport itself, which was built largely to suit US Airways' needs.
That's a good reference, but PIT didn't go bankrupt and stick taxpayers with the tab, did they? The airport still services its debt. How many U.S. air carrier bankruptcies - Ch 11 or Ch 7 liquidations - have we seen since 1992? U.S. airports are reliable borrowers.
Again, "Don't work out" != "stuck with the tab", but yes, in the end, US airports typically find ways to pay off their debt.
When things do not work out, usually they can find ways to stretch out the payment period to get lower monthly payments to try to match income and expense. This is what PIT did, as did my home airport MHT which was never a hub but was a growth spot for WN for a decade or so and is now over-built / under-utilized after an expensive expansion in the early 00s.
MHT has struggled to keep up with bond payments even after re-financing. They have sold some airport land and buildings, and have rented some unused parking lots to local car and truck dealers for storage of unsold vehicles, kind of the equivalent of selling the family silver and taking in boarders. Apparently the idea is to avoid going into default on the bonds as long as it can.
Should they go in default, I suppose it would be like any other bankruptcy, the debt holders would form a committee to decide on whether to liquidate the airport (lots of valuable land in most cases) or take a haircut on the debt, take ownership of the airport and find new management to run it. Clearly the airport authority won't want this to happen so they would presumably hit up the airport owners (in the case of PIT, the local county; in the case of MHT, two local cities) and ask for loans to avoid this.
I doubt the bonds are structured in a way that the bond holders can force the airport authority's owners to make good on the bonds, it would defeat the purpose of having an airport authority. Yet the end effect is as if they can. As above, the local government and thus the taxpayers are the owners of the airport and presumably it is not in their interest to just abandon the asset they own, so chances are they would make good on the bonds if the airport itself could no longer pay them off.
And yes, a lot of the funding for expansion programs comes from federal AIP (airport improvement) funding (at least for the airport stuff such as runways and navaids) which is paid for by fees paid by airlines which means fees paid by passengers, in most cases a large number of whom are local taxpayers, but the exact relationship of how much funding users of airport X contributes vs how much airport X receives wasn't clear in any of the articles I read.
Looping back to our topic of "When a hub is no longer a hub
", in the case of PIT it seems it has largely paid down its bonds from the early 90s expansion and it will be issuing new bonds for the upcoming project to "de-hub" their airport. They will be sacrificing 20 under-utilized gates to build a new land side terminal into the existing air side facility and getting rid of the people mover, which costs a lot to operate and maintain. As a transit passenger, I don't recall ever using the people mover, but looking at a youtube video I can see why the locals do not enjoy having to use it. It just adds one more hurdle to jump through to get on to the airplane. It's all underground and dark, unlike TPA where at least part of it goes outside. They also seem to be abandoning one of the three runways simply because it is not needed and is costly to maintain.
So, the answer seems to be
, over-expansion in the US is painful but not fatal. Hopefully you can find a way to re-finance the debt, pay it out over time, and eventually right size the airport.
Some links I found useful:
One thing I'll point out about US's peak mainline numbers is that the 355 number was indicative of the problem. US mainline flew all sorts of mini, low capacity birds including F100s, 737-200s, and DC9-30s at PIT. I think the F28s which were even smaller were mostly CLT based.
Yes, I know I've been on all three, and plenty other US narrow bodies such as 727, 757 and MD-XX. Typical flight was one of the smaller birds from my home airport at MHT to PIT, then 757 from PIT to the West Coast or MD-XX to Florida. So much nostalgia now, wish I had spent even more time exploring during my layovers at PIT. Sad for US that they really were a mashup of many airlines and ended up with a jumbled fleet of aging planes.