CBMR to support Gunnison air service

Move to Montrose off the table…for now

United and American Airlines flights will continue to serve the Gunnison Valley for the 2013-2014 winter season. After months of discussion and number crunching, Crested Butte Mountain Resort (CBMR) has decided against shifting winter air service from Dallas and Houston to the Montrose Regional Airport, and will instead focus its resources on maintaining service at the Gunnison-Crested Butte Regional Airport (GUC).

The much-anticipated announcement came at the April 5 meeting of the Gunnison Valley Rural Transportation Authority (RTA).
“Montrose is not the best option right now,” said Ethan Mueller, vice president and general manager of CBMR, adding that does not mean Montrose will never be an option. “I think we should all keep in mind that if we don’t change some of our paths locally we may be having this conversation again; we almost undoubtedly will.”
CBMR’s director of Crested Butte Vacations, Jeff Moffett, added that ultimately the resort’s goal is to grow access for consumers.
“The challenge [with Montrose] was that while there was a reduction in overall cost because of efficient economies of scale … the airlines felt there was enough risk there that they were going to put a risk premium on proposed revenue guarantees that would offset any cost savings, if not drive up costs at least in the short run.”
CBMR will likely continue to work with Telluride and the Colorado Flights Alliance to fly visitors into Montrose on Allegiant Air, and the resort will also continue to work with Telluride on lift ticket partnerships and some marketing efforts.
“It won’t be the same scale as would occur if we were putting all our revenue guarantee dollars toward Montrose, but we will continue to partner where appropriate,” said Moffett. “Right now, we have agreed to work with the RTA to secure year-round air service into Gunnison and we will continue to do that. The current level of air service really represents the minimum level of air service that we need to sustain.”
Securing year-round service is something easier said than done. For the 2012-2013 winter season, CBMR saw 3.5 percent fewer people flying into the valley than in the previous year. In terms of load factors, a common measurement of profitability used by mass transit industries, the overall load factor for United and American Airlines flights into GUC in the 2013 season was 63 percent. In comparison, the industry-wide load factor sits well above 80 percent. Because GUC flights have a lower load factor, airlines flying into the valley face an increased risk of losing money.
“The 85 percent benchmark is relevant in that that’s what we’re competing against and it’s driving opportunity cost. I don’t think it’s necessarily where we’re going to get to, or should plan on being, and I don’t think other ski markets are there either,” said Moffett. “In our market, in general you don’t have the kind of business traveler layered in with the person who’s doing business between Florida and New York layered on top of the family that’s going to Disney World, and the plane is 95 percent full.”
What you do have are flights comprised of about 80 percent visiting skiers, 10 percent second homeowners and 10 percent locals—half of whom are traveling for business. For year-round service it’s not a sustainable equation.
“With the higher fares that can accompany these load factors, people are going to take a look at skiing and say it’s damn expensive,” said RTA board member Chris Morgan. “I’m watching people in this community and other communities choosing to fly less because of higher fares and that will affect year-round service.”
While CBMR’s decision to not move air service to Montrose makes the RTA’s mission to provide and improve air transportation to and from the valley on a year-round basis a bit easier to attain, the road ahead remains difficult.
“The air service is not just about the resort, it’s not just about skier visits,” said Mueller. “Our visitors are renting condos, houses, spending money at restaurants, retail shops and so forth, but I think this year [the resort] put about $900,000 into the air program—that’s going to more than pay for the American flight. In the current situation, we’ll continue doing that because we see the benefit, but in the long term it’s not going to work.”
RTA executive director Scott Truex said the group currently has about $500,000 to commit to air service in 2013/2014. CBMR is expected to contribute to air service at the same level as previous years, and overall air service and winter flight availability is anticipated to be similar to 2012/2013. More details about next season’s air service are expected at the RTA’s May 10 meeting.
In the last decade the majority of large airlines have experienced a substantial increase in the number of seats they have to sell to cover operating expenses to the point where, according to the U.S. Department of Transportation, “some carriers could not cover operating expenses even if they sold 100 percent of their seats at average airfares.” The airlines’ expenses are then passed on to the communities they serve.
Gunnison resident Julie Feier suggested that solutions should then come from the community itself.
“We want to build on what we have, and what we have is around 15,000 residents who live here,” said Feier. “If we can change the culture of how they travel and where they fly out … we can control our own destiny.”