Yampa Valley officials are wise to start planning now for United Airlines' demise.
The financial woes suffered by the nation's second-largest carrier will have serious implications at Yampa Valley Regional Airport. Airline industry analysts are warning that United might not be able to emerge from Chapter 11 bankruptcy and could cease to exist as early as this summer. That is a scary thought when you consider United accounts for 38 percent of all air service into the Yampa Valley.
There is the very real possibility that if United goes away, our airport will have no commercial service at all during the summer. Air Wisconsin, which operates the airport's only summer flights as United Express, is a separate company from United. But without United, there are serious questions about the ability of commuter airlines like Air Wisconsin to continue serving small ski resort towns like Steamboat.
"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," Mike Boyd, a commercial aviation industry consultant, said in a recent analysis. "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."
Last year, some 15,000 people flew into the Yampa Valley during the summer on Air Wisconsin flights. Those are tourists our area's economy can ill afford to lose.
For that reason, it is critical the community's airline committee do what it is doing -- developing backup scenarios such as the plan to lure daily regional jet service from Houston on Continental Airlines.
The Houston plan has several things going for it.
First, Texas is second only to Arizona as the place of origin for summer tourists. Second, Continental is far more stable than United. And third, adding Houston would create a significant increase in summer air travel options for Yampa Valley residents.
The drawback, of course, is the cost. Revenue guarantees and marketing for a Houston flight are estimated at $250,000 per year.
While the local business community has tentatively secured commitments for about half that amount, there are no guarantees the committee will be able to raise the remainder in time to secure the flights for this summer. And even if the money does come together, where does the money come from next year and the year after that?
"Don't we have to overcome the fundamental issue of paying for the flights if that's going to be the future?" asked Chuck Porter, Sheraton Steamboat general manager and a member of the airline committee. "We need to have a bank account to go talk to the airlines with. We need a checkbook and we don't have one right now."
Porter is right. As we have said before, going back year after year and asking for pledges from local businesses is a risky way to fund airline revenue guarantees. It is also unfair -- nearly all local businesses benefit from the guarantees but not all businesses contribute.
United's struggles have crystallized the need for the community to address its air service problems. The airline committee should be applauded for its efforts to recruit new airlines and flights. But long term, those efforts will only be successful when the community supports a fair funding mechanism that provides a stable source of airline revenue guarantees.