Summer air service to GUC continues expanding

RTA board philosophizes about how best to use MRG money…Chicago on the horizon?

By Mark Reaman 

With more people flying into the Gunnison-Crested Butte Airport (GUC), the service options are expanding and the hope is to keep growing the number of flights. That could involve trying a few direct flights from Chicago in an upcoming winter during peak weeks and working to fill the three flights a day from Denver scheduled for this winter so that more flights will be added. 

“June was a record passenger month for the airport. July was not quite a record but it was close,” RTA air consultant Bill Tomcich told the Gunnison Valley Rural Transportation Association (RTA) board at the August 9 meeting. 

He said boutique air carrier JSX went to offering nine flights a week from Dallas in July. “They managed to have a 78% load factor even with the increase in flights,” he explained. “That’s 1,720 additional passengers for July which came in with just over 10,040 passengers, the second strongest July ever after July 2022 which recorded 10,900 passengers.”

Tomcich explained that the hot afternoons required some seats on United planes not be filled in July. That, he said, could have been a reason for the expensive fares in July. He said that United hit its capacity for July seats frequently given the heat. “That is a very, very strong result and another reason they are adding capacity to GUC,” he said. 

He said United added a flight for the fall making for two flights a day coming in and out of GUC. He said the airline plans to keep three flights a day between GUC and Denver all ski season. Three flights daily are now loaded in the selling schedules through February 12 and are expected to be extended through March 30 in a future schedule update. The flight that leaves Gunnison at 3:25 p.m. is going to be extremely convenient both for skiers wanting some last runs on their morning of departure and to coordinate with eastbound planes leaving Denver about 5:30 p.m. “It is a great addition to the schedule,” he said.

The county’s marketing arm is excited about the increase in GUC flights and wants to make sure the expansion is successful.

“The extra flight added this fall by United and their commitment to three flights a day this coming winter is exciting,” said Jeff Moffett during a Tourism and Prosperity Partnership (TAPP) report to the RTA board. “The TAPP is trying to fill them and letting local residents know about the extra service. TAPP is looking at a fall campaign and wants to get the word out to locals.”

“We definitely want locals to know about the service and use it,” said RTA board member Laura Puckett Daniels.

“If the flights fill up, they will keep adding more and that is a good thing,” said Moffett. 

“That sort of enhanced marketing campaign for the extra service will be quite helpful,” added Tomcich.

The RTA board will consider a contract in September with United for winter flights between GUC and Houston. Last year, the RTA ended up paying the maximum $522,000 Minimum Revenue Guarantee (MRG) subsidy for the flight despite it having solid passenger numbers. That led to a philosophical board discussion over how long to have an MRG contract with an airline for a specific city. The RTA has provided a Houston MRG for the last 14 years.

Moffett provided the board with an analysis of the economic impact of people using the Houston flight and determined those people stayed longer than the average tourist and spent more money. Tomcich pointed out that most of the people on the flight use it to get just between Gunnison and Houston and not as a connector flight from somewhere else. 

Tomcich said he has been negotiating with United personnel about the Houston MRG and the airline was compiling data for a number of different service options and prices. “We have let them know that we are not happy how things worked out last year by having to pay the full MRG cap. They want to keep the Houston flight and everything is on the table right now,” he said. “We have mentioned that the additional Denver flights could impact our Houston MRG situation.” 

“At our retreat you wanted us to look into possible Chicago service,” said RTA executive director Scott Truex. “That comes into play with United too. We are thinking about working with United for a possible Saturday winter flight from there as a test. We are in the initial stages of working at that in peak season.”

“I am supportive of the Houston MRG,” said RTA board member Ian Billick. “As far as a new Chicago flight, how much would it be and what are the other things we could be spending that money on? It sounds like our buses need work. What is the trade-off between that MRG and bus replacements for example?”

Tomcich and Truex indicated an initial test program with eight or nine winter Chicago flights is something they are considering pitching to United and would likely require an additional six-figure subsidy although no cap price has been discussed.

“Chicago is the next logical step for United here,” said Tomcich. “Gunnison is the only ski resort airport in Colorado not served by a United Chicago flight,” said Tomcich. “The way this market has been growing the last few years, I view this as an opportunity to eventually see daily Chicago flights in peak winter like United does with Houston. But it would start small, perhaps with a Saturday flight initially, and now is the time to start those conversations.”

“We could compile the data to model really well what a Chicago flight would mean for the area,” said Moffett.

“Now is the time to plant the seeds for Chicago,” added Tomcich.

“With the Houston situation, the logical step is to reduce that MRG,” said Truex.

“That would probably include some reduction in service during the slowest days,” said Tomcich. “I’m confident United will work with us for Houston.”

Puckett Daniels voiced her philosophical concerns about a continuing MRG with any airline. “If the idea originally was to use an MRG with the idea that once established the airline would continue the flights without an MRG and we could use that money for other things like a new market subsidy for a place like Chicago, or for buses, is this strategy working? Or are we just a subsidy for the airline? And that might be okay but it is a question to consider.”

“It is also a subsidy for us given the economic benefits,” said Truex.

“Right, but there is a little part of me that feels uncomfortable that public funds are used as a subsidy to this big corporation that we are filling flights on,” she said. “I’m just wrestling with some of this.”

“Is it realistic anymore to think MRGs are a start-up cost to something that will become self-sustaining,” said RTA board member Liz Smith.

“We are competing against what other communities are doing to sustain their air service,” said Tomcich. “There are a lot of substantial subsidies in our peer markets. United is hearing from everyone concerns about the MRGs.”

“United considers the MRG cost element when deciding where to fly,” added Moffett. 

“It doesn’t make sense to think about this in the absence of opportunity costs,” said Billick. “Just evaluating it on whether we like how it is turning out in the absence of anything else isn’t helpful. So to me it is a question of with that money, would we be more likely to build an alternative market faster with less cost, or should we be spending the money on buses? It is what it is.”

“As a reminder, the airport and the air service contributes more than $121 million a year in economic benefit to the county,” said GUC Airport director Rick Lamport. “So, if we spend $600,000 or $700,000 on MRGs, it is a substantial return.”

The RTA will continue the Houston MRG discussion at the next meeting.