Thursday, December 14, 2017

To help add flights, Pittsburgh International Airport (KPIT) gave OneJet one of its board members

Ten of the 35 new routes announced at Pittsburgh International Airport since January 2015 are from OneJet, a small startup airline that has quickly expanded under a unique relationship with the Allegheny County Airport Authority and one of its board members.

"I also want to recognize Bob Lewis, who's on the board here at the airport," OneJet CEO Matt Maguire said during a news conference Wednesday to announce new routes to Memphis, Kansas City, Mo., and Palm Beach, Fla. "Bob has been a huge proponent behind the scenes to make all this happen, and if there's one guy who's calling me every single day asking me how we're doing, how we make it better, it's Bob Lewis. So, Bob, thank you and I do want to recognize Bob publicly."

It wasn't mentioned during the news conference, but in addition to being on the public authority's board, Lewis is also a member of the board of directors for OneJet, which is a private company.

The authority's contract with OneJet, which Maguire and airport CEO Christina Cassotis signed in June 2016, says, "The authority is granted one non-voting seat on the board of directors of OneJet. OneJet will undertake all necessary steps to effectuate the appointment effective immediately."

"That's a situation I've never seen before," said Bill Lauer, chief investment officer at Allegheny Capital, a Downtown-based private financial services provider. "It sounds to me like a joint venture. The county's airport authority has apparently chosen to go into business with the airline." 

The authority's ability to appoint a member of OneJet's board, coupled with $1.5 million in loans from the county's redevelopment arm the airline received, has created a uniquely close relationship between the airport and the carrier, said Lauer, who has studied the airline industry for more than 20 years.

"Most authorities in that situation would pick some lawyer (who's not on the airport board)," Lauer said.

Bijan Vasigh, economics professor at Embry-Riddle Aeronautical University in Daytona Beach, said he has never heard of that situation either, but does not see a problem with it.

The situation could give Lewis the opportunity to advocate for more OneJet service to Pittsburgh, Vasigh said. It's also good to have a board member from outside the industry who can provide a different perspective.

"People from different industries can really be helpful if they choose the right individuals," Vasigh said.

Lewis is the founder of Uptown-based Orbital Engineering.

Lewis declined an interview request, but in a text message, he said, "The OneJet story is a great point-to-point solution to build a network to underserved cities and ex-hubs. It is an economic plus for Pittsburgh and other served cities."

As of Nov. 13, OneJet's board of directors was made up of three members: Maguire, Lewis and Timothy Hoeksema, former CEO of Wisconsin-based Midwest Airlines, according to a OneJet spokeswoman.

OneJet's contract with Milwaukee County, obtained by the Trib, does not include a provision that allows that county to appoint a member to OneJet's board.

The Milwaukee airport does not have a board of directors, an airport spokeswoman said.

Hoeksema led a group that invested in OneJet, according to a Milwaukee Journal Sentinel report.

When asked Wednesday if Lewis has invested in OneJet, he declined to answer the question.

Maguire also declined to answer.

Cassotis, the Allegheny County Airport Authority CEO, referred all questions about OneJet's board and investors to the airline.

Lewis did not list his membership on OneJet's board or any investments in OneJet on his financial disclosure form for years 2014, 2015 or 2016, according to documents provided by the airport authority through an open records request.

Public officials and employees are required to file financial disclosure forms annually. The forms the airport authority uses from the Pennsylvania State Ethics Commission request the person's occupation, real estate interests, creditors, sources of income, gifts received and office, directorship or employment in a business and any financial interest in a for-profit business.

Allegheny County Executive Rich Fitzgerald appoints the members of the airport authority's nine-person board.

When the authority granted a Right-to-Know Law request from the Trib seeking a copy of the OneJet contract in May 2017, the authority did not include a page regarding the terms of the OneJet board appointment.

Not including a page of the contract without giving a reason does not comply with Pennsylvania's Right-to-Know law, said Melissa Melewsky, media law counsel for the Pennsylvania News Media Association.

"If you say, 'I want the agreement that was signed with this entity,' that means all of them and all pages," Melewsky said. "If they're going to hold something back, they need to explain why."

Lewis did not cast a vote to award the $1 million airport incentive or to award the $1.5 million in county loans (the first of their kind) or $500,000 in state loans OneJet received in exchange for basing its airline here and agreeing to add service to 10 cities, a commitment the airline met with the additional routes announced this week.

The airport board in April 2016 voted unanimously to allow Cassotis to execute incentive agreements with airlines without a board vote. 

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