Steamboat Springs Resort leaders here have begun preparing for the possibility of life without United Airlines next ski season.
"We've already formally initiated planning for (the winter of) '03-'04," the Steamboat Ski & Resort Corp.'s Andy Wirth said. "We're obligated, given the information we have, to develop scenarios that include a lack of service by United Airlines. Certainly, we hope that's not the case. But it would be irresponsible to not develop other scenarios."
United, which is struggling to reorganize under Chapter 11 bankruptcy, provides 38 percent of air service into Yampa Valley Regional Airport during ski season. Most of that passenger traffic arrives from Denver on Air Wisconsin flying as United Express. United represents the resort's only service from the West Coast in winter, and United Express is the only commercial airline serving YVRA in spring, summer and fall.
Air Wisconsin flies here under contract with United. The major airline sells the tickets and pays the smaller airline a fee for operating the flights.
Wirth's primary emphasis is on winter airline service, but he's concerned enough about United's fate that he convened a group of city, county and resort leaders last week to raise their awareness of the downside. The group met with Evergreen-based commercial aviation expert Mike Boyd. They will meet again on Tuesday.
"We don't have anything on the table right now, but we're trying to assess, what would be the worst-case scenario," Sandy Evans Hall said. "And we'll ask, 'Can we afford, as a community, to back-fill with additional ground or air transportation?'"
Evans-Hall is executive director of the Chamber Resort Association. She said many of Steamboat's summer tourists arrive by automobile, but one of her highest priorities is working with the Sheraton Steamboat Resort and Steamboat Grand Resort Hotel to learn what group business is already on the books for this summer. Her staff will also approach local businesses to talk to them about their needs and preferred alternatives, should United Express service into the valley be reduced further.
In a recent written report devoted to predictions for 2003, Boyd had this to say about the United Express system: "The smaller feed markets in (Chicago O'Hare, Denver International Airport and San Francisco International) will be seriously threatened with material losses of air service. Unless there is a replacement at these hubs of the size and scope
of United's operation, there will be lots of airports hurting should United fail."
Wirth said his contacts in the industry tell him that if United was forced to abandon its Denver hub, another of the four remaining major airlines would probably fill a portion of the void. But the replacement service might amount to 90 to 110 flights a day instead of the more than 240 flown by United. And there would be a delay in implementing that service. Further, United's successors at DIA might leave the small markets represented by the Colorado ski areas underserved through summer and fall until ski season offers increased demand for airline seats.
Should United fail in its efforts to gain wage concessions from its employees and convince its creditors it has a viable plan to return to profitability, industry analysts say there's a chance the airline will cease to exist. There is also a significant chance that United's service to its hub at DIA and Colorado's ski areas will continue at similar levels. But Wirth said the planning he and colleague Janet Fisher are involved in is not so straightforward.
"Some people are tending to think about this in black and white," Wirth said. "But it's a question of whether there will be a reduction in service through the Denver hub. It's the extent to which they are here. We hope they remain a good partner of ours. But what if they're greatly reduced?"
Wirth and Fisher have focused on origination and destination data to determine the key markets for preserving air service into the Yampa Valley in ski season. As a result they've held preliminary discussions with representatives of both Delta and U.S. Airways about flying to YVRA. Delta could theoretically restore California connections should United significantly reduce its 240 to 280 flights a day through DIA.
U.S. Airways, like United, is in bankruptcy, but Wall Street analysts have praised its reorganization plans. It could resolve its bankruptcy as soon as next week.
Delta could potentially serve YVRA through its hub in Salt Lake City with connections on a regional jet.
That scenario would involve asking vacationing skiers from California to journey beyond Utah resorts like Park City, Snowbird and The Canyons.
The loss of arriving airline seats on United Express would be a double blow to the resort community because they do not carry with them the demands for minimum revenue guarantees made by other airlines flying here during ski season.
American, Continental and Northwest fly direct routes to YVRA from cities like Minneapolis, Chicago, Newark, Houston and Dallas.
However, the resort business community puts up almost $2.2 million in revenue guarantees to lure those ski season flights to the valley. Of the $2.2 million, the Ski Corp. puts up about $1.3 million.
Wirth said of the 38 percent share of overall air service represented by United, 5 percent of that share is on a daily United 737 that requires guarantees. The balance is free of revenue guarantees.