The Crested Butte News Serving the Gunnison Valley since 1999
RTA and CBMR will need help footing the bill
The 2011-2012 ski season has barely come to a close and already the Gunnison Valley Rural Transportation Authority (RTA) and Crested Butte Mountain Resort (CBMR) are working out details for next winter’s air program.
With a contract pending with American Airlines for direct service from Dallas, it looks like the air program—and the price tag—will be similar to last year. It also looks like the level of available funding isn’t quite where it needs to be.
At an RTA board meeting on Friday, April 6, CBMR general manager Ethan Mueller confirmed that the resort will not be able to fund the air program at the same level it did this past season. CBMR had promised American Airlines a minimum revenue guarantee (MRG) of $1.3 million for direct service from Dallas to Gunnison-Crested Butte during the 2011-2012 ski season.
“There was a commitment at the last meeting to maintain service out of Dallas and Houston and increase Denver. I know the resort cannot contribute what it did last year, which puts us into a little bit of a deficit,” Mueller said.
And in fact, the RTA has agreed to contribute $230,000 to this year’s MRG to American so that CBMR will not shoulder that amount alone. The total MRG and the number of incoming flights and seats are not yet public, but according to Scott Truex, executive director of the RTA, the Dallas service will likely be similar to the 2011-2012 season, when American provided daily service for most of the ski season.
That commitment leaves the RTA with only $220,000 for an MRG to United Airlines to secure direct service out of Houston. During the 2011-2012 ski season, the RTA committed up to $420,000 for that service, and although negotiations are still ongoing with United, Truex said it’s likely that the RTA will be short $100,000 to $200,000 for this year’s MRG.
The good news is that MRGs for service into the Gunnison-Crested Butte Airport appear to be stabilizing. Truex said final numbers for this year’s air program are not yet available, but the program appears to have performed well enough that it’s likely the RTA and CBMR won’t have to pay full revenue guarantees to United or American. Jeff Moffett, director of CBMR’s Crested Butte Vacations, agrees it was a good year.
“It paved the way for an easy conversation for next year’s American Airlines service, and the result of that is that we expect to have the American flights loaded for sale by mid-April, a month and a half prior to last year,” Moffett said.
Unfortunately, it did not pave the way for a decrease in next year’s MRGs, in large part because the cost of fuel continues to rise. Finding additional funds was the subject of much discussion at Friday’s RTA meeting, where ideas ranged from selling ads on the outside of the RTA buses to soliciting money from companies outside of the valley whose workers reside in the valley.
The conversation vacillated between new funding sources and the need to improve the quality of air service. Local businessman Kevin Jost argued that improved quality—not just the schedule, but also factors like customer service—was critical to fundraising efforts.
“Who owns the quality?” Jost asked. “Somebody has to take ownership of this air service product.”
But while no one disagreed with his statement, the board questioned the mission of the RTA and whether fundraising and quality improvement fell under its scope. The general consensus seemed to follow the notion that the RTA is tasked with distributing RTA funds, and additional fundraising efforts needed to stem from the business community.
“If we’re going to move forward [with fundraising], we should form a group of folks who go out and organize a fundraising effort and take these ideas and explore them. In my opinion I think it should come from the business community,” said board chair Chris Morgan.
The board discussed the ways some communities, like Jackson Hole, Wyo., rely on the business community to fund the air program much more than in the Gunnison Valley. The local government in Jackson Hole appropriates some money out of its general fund, but there is no dedicated tax for the air program and local businesses contribute heavily to the program.
Commissioner Paula Swenson pointed out that in the Gunnison Valley, the newly formed Economic Development Council (EDC) could be a potential partner in raising funds. The group, she said, had already identified air service as one of the valley’s top concerns.
“Maybe they can become champions to move forward with getting more businesses involved… at least in the short term we need to raise money,” Swenson said. “We have this conversation over and over, but we are not the ones who need to keep having it. It’s the greater community that needs to start having this conversation as well.”
Candace Coen, member of the EDC, was in attendance at the meeting and observed that the general public doesn’t yet understand the need to improve air service.
“It’s product perception. There has to be a story behind why this is so important… I would bridge to say most of the county doesn’t understand why we have to do this,” Coen said.
“Before we get a better product, we’re going to have to make efforts to make the airport more important [to the public],” Swenson said.
While no formal partnership was established between the RTA and the EDC at Friday’s meeting, a letter from Western State College president Jay Helman demonstrated that the airport is important for more than winter tourism. Helman wrote that the airport plays a significant role in the college’s ability to recruit students and faculty—93 percent of students come from more than 100 miles away, and 30 percent come from outside of Colorado.
Helman’s letter also stated that a 2010 economic impact study showed that Western hosts 6,400 annual visitors for camps, conferences and athletic events and 13,800 for student- and school-related events. While the college does not know how many of those visitors use the airport, the visitors do spend $4.1 million in Gunnison Valley. Helman urged the RTA to consider the college’s needs as they negotiate with the airlines. There was no mention, however, of WSC’s contributing funding.
Several Gunnison Valley businesses contributed to the 2011-2012 air program, including $100,000 from the Mt. Crested Butte Town Center Association and up to $20,000 from WestWall Lodge Property Management to support MRGs. Wells Fargo gave $100,000 to support CBMR’s marketing and special promotions efforts.
