RTA promises ski resort “best effort” to raise more money

Some signs indicate air moving in right direction

The Gunnison Valley air program is showing signs of improvement even as its board scrambles to find funding for next winter.
For the first time, United Airlines will refund money to the Gunnison Valley Rural Transportation Authority (RTA). The airline’s 2011-2012 service from Houston to Gunnison performed well enough that the RTA will get back $44,091 of the $420,000 guarantee it paid up front.

But thanks to rising fuel prices, minimum revenue guarantees are still high and the board is coming up short when it comes to funding next season’s air program.
“Overall, the Houston flight did much better than anyone expected, particularly United,” said RTA airline consultant Kent Meyers. “I have to hand it to … the marketing group. They did a very good job, and the service has stabilized and hopefully has bottomed out.”
While $44,091 might sound like small potatoes in the face of revenue guarantees that top $1 million, it is indeed a step in the right direction. That money can now be rolled over into next year’s air program—and right now, the RTA needs every penny it can get.
Minimum revenue guarantees (MRG) are still on the rise in spite of performance improvements, in large part due to rising fuel prices. In one month, Meyers saw spring fuel prices jump from $3.57 per gallon to $4.08, and he doesn’t expect that trend to soften. As a result, securing 22 flights from Houston—similar service to the 2011-2012 program—would cost the RTA just under $353,000.
With only $220,000 available in RTA funds and the $44,091 in refunds, that still leaves the board $89,000 short. And partner Crested Butte Mountain Resort has been clear that it can’t shoulder the American Airlines MRG and cover the remainder of the Houston flight’s MRG at the same time.
The resort signed a contract with American earlier this spring for service out of Dallas, and flights have been available for sale since April. According to Jeff Moffett, CBMR’s director of Crested Butte Vacations, last winter’s Dallas service—for which CBMR agreed to a $1.3 million MRG—performed well but there was no significant decrease in the MRG for the 2012-2013 ski season because of fuel concerns.
“It’s the exact same service and contract [for next winter]. Financially [the Dallas service] performed well, but everyone is anticipating that fuel will go up,” Moffett said. “With American in bankruptcy, it’s definitely needing to eliminate any risk.”
If CBMR and the RTA can’t find additional funds for the Houston service, the number of flights from Houston would drop from 22 to 14 flights, many of the losses hitting during spring skiing. That’s concerning to CBMR general manager Ethan Mueller, who pointed out that it could have a significant economic impact across the valley. Factoring in average load factors and the average spend per person, Mueller said that would result in $2.1 million less coming into the valley.
“Everybody knows how important this program is to the resort, but quite honestly… this program is important for everyone,” Mueller said. “That $2.1 million? The resort’s going to see 40 to 50 percent of that.”
The rest would be spread across the valley. Mueller also said CBMR is pursuing several different fundraising options, and felt certain the RTA board could also think of sources for $10,000 or $20,000 donations.
At one point, the RTA hoped the newly formed Economic Development Council could become a fundraising arm for the air program. But according to County Commissioner Paula Swenson, that’s no longer an option, saying, “Being such a new group… they felt they themselves going out to solicit additional funding was beyond the depth of scope they’re able to do at this time.”
That leaves the RTA to solicit funds itself, which raised a red flag for board chairman Chris Morgan. He reminded the group that when the RTA ballot language was passed by Gunnison Valley voters, a very clear promise had been made that no further funds would be solicited. However, most of the board spoke in favor of seeking contributions from the municipalities to maintain consistent service into the Gunnison Valley (Crested Butte was not represented because mayor Aaron Huckstep was unable to attend the May 18 discussion).
The question at hand became the timeliness with which money could be raised and an agreement entered with United. Jeff Moffett, CBMR’s director of Crested Butte Vacations, pointed out that Dallas flights were already available through American Airlines. Groups have been taking advantage of those flights, and the same would be true for the Houston flights if an agreement could be reached with United.
“I’ve been told by my sales manager that if the Houston flight were real in the next week or so, the Tampa Ski Club could block out seats relatively soon,” Moffett said.
“What’s the chance that the RTA board could commit the $220,000 that we have to CBMR, having CBMR sign the contract and then we can go after funding for the $89,000?” Commissioner Phil Chamberland asked.
“I think we could entertain that if we get a commitment to go after the $89,000,” Mueller said. He felt optimistic that with a commitment to maintaining the air program at its current levels, service would continue to improve.
“With what we all saw this past year on flights [decreases] and the year that we had [with snow], I think we should expect some further success,” he said.
“If we don’t shore up this winter program, we’re never going to go to the table and get those shoulder seasons and summer seasons shored up,” Swenson commented.
The RTA approved a motion to commit $220,000 to CBMR for Houston service, and also pledged to help raise an additional $89,000.
“I appreciate the level of commitment,” Mueller said. “I know this is a monumental change for this board, and I appreciate anything you guys can do. I’m very hopeful that you guys can find an additional $89,000 and know that we’re going to continue to find those funds too.”