Steamboat Ski and Resort Corp. announced Thursday that Frontier Airlines will fly daily at YVRA next winter, to and from Denver, with a 99-passenger, Embraer 190 aircraft.

Frontier Airlines/courtesy

Steamboat Ski and Resort Corp. announced Thursday that Frontier Airlines will fly daily at YVRA next winter, to and from Denver, with a 99-passenger, Embraer 190 aircraft.

Frontier to return to YVRA this winter

Ski Corp. announces airline plan to fly daily to Hayden airport

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Flights to and from YVRA can be booked through Steamboat Central Reservations at 800-922-2722 or online at www.steamboat.com.

— Frontier Airlines will return to Yampa Valley Regional Airport next winter.

Steamboat Ski and Resort Corp. announced Thursday that the airline, through owner Republic Airways Holdings, will offer a daily flight to and from Denver International Airport starting Dec. 16 and ending April 10. The flights go on sale Sun­­day.

Andy Wirth, Ski Corp.’s senior vice president of sales and marketing, said Frontier would fly a 99-passenger Embraer 190 aircraft in and out of YVRA. The announcement comes as Ski Corp. faces its second consecutive winter season with declining airline seat capacity.

Wirth said Thursday that the total seat capacity for 2010-11 is between 123,000 and 128,000 seats, down from about 134,000 seats this past winter. YVRA’s total seat capacity was about 158,000 in the winter of 2008-09.

“We’re down substantially on total air capacity,” Wirth said about the upcoming ski and snowboard season. “We know we need more airline seats, and that’s frankly what we’re focused on.”

Frontier provided service to YVRA in winter 2008-09, but it dropped the service the next summer amid Chapter 11 bankruptcy. The airline initially flew three daily flights to YVRA, using Bombardier Q400 aircraft operated by Lynx Aviation.

“We strongly asserted the point to the Frontier senior executives, at that time, that they were flying far too many airline seats into the valley,” Wirth said. “We actually knew that they were going to fail.”

Playing on a Frontier advertising slogan, Wirth said the airline’s new ownership has created “a whole different animal” this time around.

“We’re truly thrilled,” Wirth said about the daily flights this winter. “This is a whole new carrier with new management … they’ve been asking questions; they’ve been very receptive to input.

“That’s why we’re so excited about this.”

American Airlines, Continen­tal Airlines, Delta Air Lines, Northwest Airlines and United Airlines will continue their YVRA service next winter. Delta acquired Northwest Airlines in 2008.

Wirth and other Ski Corp. officials work with airlines to schedule flights each season. The resort and local businesses, through a marketing district, pay to guarantee a certain amount of revenue to airlines that fly to YVRA. Wirth said in April that the payments “will be north of $2.4 million” this year, after a ski season that saw a drop in 9,000 passengers despite discounted fares.

Frontier wasn’t part of the revenue program during its first run at YVRA and won’t be this time, either.

“We have not provided any kind of revenue guarantees on this flight,” Wirth said.

The incoming Frontier flights are scheduled to leave Denver at 12:05 p.m. and arrive at YVRA at 12:55 p.m. daily. Outgoing flights are scheduled to leave YVRA at 1:30 p.m. and arrive in Denver at 2:25 p.m.

Wirth said those flight times would provide “ideal” connection options for travelers. A Ski Corp. news release said Frontier offers routes to more than 70 destinations in the United States, Mexico and Costa Rica.

“We are very excited to be back in Steamboat Springs and one of Colorado’s premier winter destinations,” Daniel Shurz, vice president of planning and strategy for Frontier, said in the release.

Wirth said he’s been talking closely with Frontier officials in recent weeks.

“Frontier’s analysis has yielded that the demand is warranted to fly to Steamboat,” he said.

Comments

Scott Ford 4 years, 1 month ago

Scott W - I need the benefit of your logical thinking. Each year Ski Corp negotiates with American, Continental, Delta, Northwest, and United. The terms of the "deal" are different with each carrier but they include a payment for opportunity cost and a payment that involves a minimum revenue guarantee.

It is my understanding that the opportunity cost payment is a given and it is essentially the sweetener to the "deal" to entice the airlines mentioned above to fly to YVRA. The variable cost in the airline guarantee program is the minimum revenue guarantee. It is my understanding that the minimum revenue guarantee is a calculation based on average load factor over the season. For example, if the airine wanted a minimum revenue of $xx million of dollars which is based on achieving an average load factor of 65% and at the end of the season the load factor was only 62% the airline guarantee program makes up difference to the airline.

Based on the very specific numbers Andy Wirth referenced in the article it would seem that the arrangements with the airlines for the 2010/11 season have already been negotiated or are very close being completed.

So now, Frontier Airlines begins flying to YVRA during the upcoming season. They are not a part of the guarantee program. They will have 115 flights. Assuming a 5% of the flights will be canceled that means that about 110 flights. At a load factor of only 50% (99 passenger aircraft x 50% = 49.5) that would mean about 5,500 passengers. If Frontier aggressively promotes and prices this, flight and achieves a load factor of 65% that would mean 7,000+ passengers.

It would seem to me that these passengers flying on Frontier dilute the market share of the other carriers making it yet even more difficult to achieve the minimum revenue guarantees likely already negotiated with the airlines for the up coming winter season. Although Andy put a positive spin on things (what choice does he have? - Frontier can do whatever they want to do) I cannot think that Frontier's announcement was a cause for great celebration.

I recognize that the airline guarantee program has a host of complexities and I have greatly oversimplified it. However, do you see a flaw in my logic? It seems to me that this was an element of this story that the Pilot missed. (Way too funny of an unintended pun in this context.)

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housepoor 4 years, 1 month ago

Maybe by Frontier adding another YVRA-Denver leg it will force United to price its YVRADen leg more competitively making it more reasonable for markets like Fla, S Cal and Az to get here because Frontier has direct flights to Den from those markets. Ski Corp probably recognizes this and will increase marketing in those areas. I’m not sure if the YVRADEN flight is part of the guarantee program? But if we have the same # of visitors through YVRA then yes Frontier will dilute the market making it difficult to achieve the minimum guarantees.

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Scott Wedel 4 years, 1 month ago

Scott F. I think Ski Corp (as well as the Chamber which I believe funds a chunk of it) start the year stating a projected cost that does not include having to make further compensation for not making minimum revenues. Not making minimum revenues is not in their calculations - expecting that would be as crazy as lenders accepting that housing prices could decline during the housing bubble. Though, to be fair, the payments needed to compensate for not making minimum revenues is not enough to threaten anyone's solvency and so the payments can be made in the Spring and it just affects what is left for next year's flight program.

So if you start from the viewpoint that reaching minimum revenues is going to happen then Frontier adding flights does not affect what has to be paid for not making minimum revenues.

And, in fact, from that perspective the Frontier flights is a win-win situation because the same promotions that encourage flights on other airlines can bring added tourists here so it adds nothing to promotional expenses, but makes those expenses more effective.

It is what I like to call "boosterism financing" that is so common in SB. That when it comes to tourism that any money spent is paid back so many times over that it can never go wrong. We see it in the base area that stated they wanted to get as big of a bond issue as possible and then was "stunned" that when school district move cut out revenues days before the issuance that then the bond issuer got upset and filed default notice (because that was the only way not to disburse the entire bond amount).

But at least in this case, while they never talk about it going wrong, at least they can cover the costs of it going wrong.

ps. How confident are you that July sales tax receipts will be better than last year? Last year was bad, but I think not so bad that this month we will not continue the consistent trend of sales tax being modestly weaker. We have a "great" weekend but lodging was still down vs year ago and I think the lodging number is still being compared against the old method of calculating which counted fewer people. So, to even match last year we should have seen a bigger lodging number.

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Scott Ford 4 years, 1 month ago

Good Morning Scott W. - I have asked three people (you included) about their understanding of the airline winter season airline guarantee program. Each has a slightly different understanding about its structure. It is something I ought to better understand - so it is something I am putting on the list to learn about next week.

I know that the Gross Retail Sales forecast that I recently completed for Yampa Valley Partners seems to be getting a lot of attention. How comfortable am I with the forecast for July-Sep 2010 sales? Reasonably OK. I wish I could claim a some fancy process of how this number was arrived at.

It is based on calculating index for gross retail sales at both the county and national level. Since the state data used in this calculation begins in May 1999, which was used as the baseline and given a value of 1.00. So May of 2000 was compared to May 1999 and an index value assigned by dividing May of 2000 by May of 1999. June of 2000 to June of 1999 ECT.

This index value at the county level was then correlated to the index calculated for national sales for the same monthly periods. .

In Moffat County the correlation is .81 in Routt it is .64. Based on the relative strength of the correlations (recognizing that Routt is a wee-bit weaker, we simply use the sales forecast that the Department Commerce develops for national retails sales. I know that this is not highly creative - but we needed to do something that was relatively easy to do and yet used local data. To put it simply, we spend locally much like our 309 million fellow Americans. Is this perfect - heck NO! But it does not need to be.

What I am trying to accomplish with the forecast is to have folks not blame the economy for absolutely everything going on in their business. For example, sales in July 2010 have a strong possibility of being higher than July 2009. If I was a retailer and I noticed that my July for 2010 were 15% down from 2009 levels - I should not simply blame the majority of this decline on the economy. I need to look a wee-bit deeper to see if there is some flaw in my businesses.

This the primary reason for doing the forecast - is to give folks something that may result in a wee-bit more introspection about their business model.

In noticed this morning that the Today is running the article that appeared in the Craig Paper on Wednesday.

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