Tuesday, October 19, 2010
Steamboat Springs Yampa Valley Regional Airport will charge some of the highest landing fees in Colorado this ski season, but the airlines are on board.
Airport Manager Dave Ruppel said Monday that landing fees charged to the five commercial airlines serving the airport west of Steamboat Springs will go up 5.5 percent beginning Dec. 1 and can be expected to cover about 65 percent of operating the aviation side of the airport. The increased fees won’t necessarily be passed on to passengers — the airlines understand they’ll be able to recoup the increases next spring. That’s when they will renegotiate the terms of minimum revenue guarantees the Steamboat resort community underwrites in order to secure ski season air service.
“We’ve made an effort to recoup more of our costs through these fees, but we’ve been very careful how we’ve raised the fees,” Ruppel said. “We’ve had a lot of discussions with Ski Corp., the airlines and our community partners.”
Ultimately, the Steamboat Ski and Resort Corp. and the Local Marketing District, which distributes lodging taxes dedicated to air service, are likely to share the brunt of the fiscal impact.
YVRA is unlike other small community airports, he added. The fact that the community negotiates contracts with the airlines and guarantees them minimum revenues makes it easier to impose higher fees.
The Routt County Board of Commissioners is expected to approve a slate of airline fees for 2010-11 today.
County Commissioner Doug Monger said they decided during recent budget hearings to build an increase in health insurance costs for airport employees into the new fee structure. The commissioners were hit with a proposed rate increase of 47 percent and will plan on building an increase of 35 percent into overall airline fees as they continue to shop for a better health insurance rate.
“We need to raise fees to maintain the airport,” Monger said. “Keep in mind, we’ll have zero (new full-time employees), and we’re projecting a 9 percent decrease in (passengers). We’re still covering a lot of fixed costs.”
Again this year, the airport will be self-sustaining and won’t rely on the county’s general fund to fund its operational budget, Ruppel added.
Airports typically charge airlines a landing fee based on the known weight of each make and model of commercial aircraft. Steamboat’s fee will go up 20 cents from $4.08 per 1,000 pounds of gross landing weight during the winter of 2009-10 to $4.28 for the winter of 2010-11.
Ruppel said Aspen charged $3.93 last winter, and Eagle charged $3.22. He suspects those two mountain airports will use the higher Steamboat fees as a basis for raising their own fees.
Landing fees aren’t the only fees the airlines pay for using the airport. In addition, they rent terminal space for their exclusive and shared use. For example, American Airlines will pay $41,000 for its ticket offices during the 12 months beginning Dec. 1, with four monthly installments spread throughout the primary months of ski season. The airline also will pay $228,260 for terminal space they share with the other airlines.
“When you take all of the airline fees combined, we’re actually significantly lower than the other mountain airports,” Ruppel said.
American also will pay a security fee of $2.59 per departing passenger to cover the cost of providing Hayden Police Department officers in the terminal.
Ruppel confirmed that part of the need to raise airline landing fees can be attributed to fewer arriving passengers seats. The reductions are due in part to a shift to a smaller aircraft on one route, and the elimination of the daily Boeing 737 on United Airlines and Delta flights from Salt Lake City. Frontier’s new daily service on a 90-passenger jet will help on the plus side.
Still, the net reductions are expected to add up to reduced landing fee revenues and the need to raise those fees to cover more than half the cost of running YVRA’s airside operation.
“It’s all part of a bigger picture,” Ruppel said. “For us to continue to provide a high level of service, we need to change our rates. When it comes to keeping runways and taxiways clear of snow, I think we do a better job than anyone else. And keeping those flights coming in and going out makes the airlines more profitable.”