Ski Corp. execs share views of post-merger airline industry with Routt County commissioners
May 19, 2015
Steamboat Springs — Two Steamboat Ski & Resort Corp. executives, who actively negotiate with airlines to secure ski season jet flights into Yampa Valley Regional Airport, sought to reassure the Routt County commissioners Tuesday that they are working to rebuild the passenger numbers that county government counts on to operate the airport without dipping into general fund revenues.
But Steamboat Senior Vice President of Sales and Marketing Rob Perlman and Airline Program Director Janet Fischer also spoke plainly about the reality of negotiating terms of air service in the post-merger era when increasingly they find themselves competing for aircraft with beach resorts in Mexico.
"We go in (to airline negotiations) with a whole list of cities we want to look at, and they quickly whittle that down," Perlman said. "We ask them to look at the success we had last winter with (Washington D.C.) Dulles and San Francisco and L.A. But we're seeing an explosion of beach destinations where we're competing with those markets on opportunity cost for that plane to go to Mexico versus a ski resort."
He said nearby Eagle County Airport serving Vail has not been immune to the same market pressures, pointing out an airline campaign and newspaper article reporting that the Vail Valley had lost 100,000 airline seats since 2007-08.
The commissioners are focused on seeing growth in year-around enplanements (passengers boarding flights) to rejuvenate the weight-based landing fees, rental car fees, passenger facility charges allowed by the FAA and even parking lot revenue that all contribute to revenues that fund operations of the airport. They heard a consultant tell them in April that they can expect negative operating cash flow and tight annual cash reserves through 2024 due largely to a six-year decline in enplanements.
YVRA saw more than 140,000 year-round departing passengers in both 2007 and 2008, but after the economy fell into recession, those passenger numbers have fallen 35 percent to 95,917 and have been slow to recover.
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Fischer told the commissioners that winter airline seats grew 8 to 9 percent last winter. Records kept by YVRA staff show ski season-only enplanements December 2014 through mid-April 2015 were 79,382 compared to 72,856 for the same period the preceding winter, an increase of almost 9 percent.
Asked by Commissioner Cari Hermacinski if there was any chance of adding a customs agent at YVRA to enable flights form Canada, Perlman said he had an open mind.
"I think we look at all those options," he said. "With two Intrawest resorts, Blue Mountain (near Toronto) and Tremblant (near Quebec), they are the second and third most visited ski resorts in Canada behind Whistler Blackcomb, and the fact they are part of the Intrawest family, that makes it very attractive."
Airport Director Kevin Booth suggested travelers from Canada could be pre-screened for entry into the U.S. before leaving Canada, eliminating the expense of basing a customs agent here.
Fischer was quick to point out, though, that the most effective strategy for YVRA during ski season has been to secure flights from regional hub airports that draw passengers from cities beyond.
"What works really good for Hayden is having a nonstop that starts in a hub that connects to 40 or 50 cities," she said. "Fifty to 60 percent, sometimes even 70 percent, of the passengers on a direct flight," may have started their day from a city beyond the hub.
So, will the ski season flight program expand its reach this coming winter?
When Booth told Perlman he admired the efficiency of Alaska Airlines' operation of direct flights to Hayden from Seattle, Perlman responded: "There is opportunity to grow Seattle and other markets."