Airline service set for winter season

More airlines on board for ski season

Air service into the Gunnison/Crested Butte Regional Airport for next winter is quite literally taking off. For next season, the Gunnison Valley Rural Transportation Authority and Crested Butte Mountain Resort (CBMR) have partnered to bring new destinations, a new airline, and more available airline seats than last winter.

However, the number of available seats and travel options are still less than what has been offered locally in years past. Even so, transportation officials say the new airline schedule is a step in the right direction toward building a better airline program for the Gunnison Valley. It also represents a new strategy in attracting a wide-reaching audience of destination visitors, according to CBMR vice president and chief marketing officer Ken Stone.
Next winter the Gunnison valley will be served by flights on American Airlines, United Airlines and—new for this year—Delta Airlines.
Several cities will also be added as service options, including Salt Lake City, Chicago, and Atlanta. The new flights complement existing connections from Denver and Dallas.
According to RTA airline consultant Kent Myers, all the flights will be loaded and tickets available for purchase on Monday, June 15. “I think this year we’ve made a quantitative leap toward re-building the air service,” Myers says.
The new flight options aren’t provided without a price. The RTA and CBMR are collectively putting $1.4 million on the line in guarantees to secure the new flights.
The RTA is a voter-approved organization that coordinates and develops ground transportation and airline service options for the Gunnison valley. Part of the RTA’s responsibility is providing a financial guarantee to airlines flying into the local airport in the event that ticket sales do not cover operating expenses. In recent years, the RTA has split this responsibility with CBMR.
After the two entities were forced to pay nearly $900,000 to the airlines to meet the guarantees from the 2006/2007 winter season, flights were scaled back last winter in an effort to increase the passenger load on each plane.
Due to the scale-back, approximately 9,000 inbound seats were lost during last winter’s air service compared to 2006-07 ski season. The strategy was partly successful, saving the RTA from paying nearly $200,000 in guarantees between United and American Airlines for service from Denver and Dallas. With that success under their belts, the organizations hope to recoup some of the previously lost seats, with 6,000 additional seats planned for this winter.
Continental Airlines, which did not make the final cut, was initially offered a $700,000 guarantee to provide a daily flight on a regional jet from Houston, which could have added more than 2,000 round-trips.
Stone says Continental ended up being a hard bargain. “We took a really serious run for that service. Their price kept escalating based on different conditions. We weren’t able to put together a deal that was responsible for the community… It was too cost-prohibitive,” Stone says.
The RTA and CBMR are providing Delta Airlines $300,000 in guarantees to provide a daily flight from Salt Lake City, Utah, on a 50-passenger regional jet. They will also provide a $200,000 guarantee for Delta to provide a Saturdays-only flight from Atlanta on a 188-passenger Boeing 757. There are more than 4,000 potential round-trip seats between the two destinations.
American Airlines will be flying a single, daily 737 from Dallas for a guarantee of $500,000. In addition, the RTA is providing American Airlines a guarantee of $250,000 to run a Saturday-only flight from Chicago on a 757 jet.
The RTA and CBMR initially hoped United would continue its daily service from Denver without a service contract or guarantee. Stone says after negotiating with the airline the RTA decided to offer United a $400,000 guarantee to provide three daily flights out of Denver on a 66-passenger regional jet.
Stone says, “Sometimes it was a bit touch and go with the airlines… With fuel being a big risk it was important to establish (guarantee) caps that were reasonable with us and the RTA.”
The total performance guarantee being offered for all of the flights adds up to $1.4 million. Stone says CBMR has “stepped up our commitment to the air program… We’re sharing even more of the up front risk.”
For the proposed air service, CBMR group sales director Jeff Moffett says CBMR and the RTA will split the first $500,000 of guarantees. Past that, he says, the RTA will be accountable for the next $550,000 in guarantees, bringing the RTA’s total commitment to $800,000. CBMR is then accountable for the final $350,000.
Stone says there has been some question regarding the new cities chosen for service. For instance, he says, many people have wondered why Salt Lake City was chosen as a service destination. He says about 2 percent of travelers will actually originate from Salt Lake City, but the new destination will provide connections to a host of other airports.
Including Chicago and Atlanta, Stone says the idea is to develop a hub and spoke system that gives travelers more options and a better chance of getting to Crested Butte with only one connecting flight. “It’s about building patterns that are convenient for vacation travel,” he says.
Myers agrees that the new service options are risky business, particularly in light of national economic factors and the rising cost of fuel. But with strategic marketing, Myers believes the program will be a success. “We’ve got an opportunity on the table here. We can’t afford to come up short to the point these people are concerned about servicing (in the future).”
Myers doesn’t believe the result will be a make-or-break winter. “We will lose some money, probably. The RTA doesn’t have any problem with that as long as we’re filling the flights and stimulating the economic machine.”
CBMR’s buy-two/get-one-free program will return for next winter, Stone says. For this program, CBMR is buying a variety of tickets across the airline program, which will then be offered as a bonus for anyone who buys two regular-priced tickets. In this way, the resort is not only directly contributing to the airline’s financial performance, but offering an incentive for more travelers to fly into the local airport, Stone says.
Because CBMR has the last $350,000 on the line, Moffett says, “The fact that we have the third tier gave us the incentive of trying to pay it down… We’d rather use the money promotionally to fill it up rather that letting them fly empty and paying for the seats later. … It’s really a pay-now or pay-later scenario.”
CBMR is also offering a baggage incentive, providing a $25 voucher for baggage for those customers who stay five nights or longer. Moffett says only one promotion can be used at a time, and to get either one, flights must be booked no later than November 6.
However, Stone says, they’re getting a head start on selling and advertising the new service options.
“We’re much further ahead than we were last year at the same time,” Stone says.