Tuesday, November 15, 2011
Avon The airline business can be tricky. It’s also potentially expensive for communities that want to bring flights to their airports.
For much of the history of commercial air flight to the Eagle County Regional Airport, airlines have demanded, and received, revenue guarantees. The way they work is fairly simple: If airlines don’t meet certain passenger and revenue targets, communities agree to pay up to a predetermined amount to cover the airlines’ losses.
The Eagle Air Alliance, which has representatives from Vail Resorts and other local businesses and governments, has for several years been responsible for coming up with the money to cover the potential losses, which rarely hit their maximums. Until now, the alliance has worked on a year-to-year basis. Now, though, the group is pitching a three-year plan to bring flights from various cities, including San Francisco, Washington, D.C., and Toronto.
To do that, the alliance is looking for about $525,000 in pledges from private and public sources, including $30,000 each from Vail, Avon, Eagle, Gypsum and the Beaver Creek Resort Co.
Kent Myers, a local air travel consultant, tried last week to convince the Avon Town Council that the $30,000 pledge would be a good investment.
Estimates provided by the air alliance indicate that the air service would generate new customers — Myers said as many as 65 percent of passengers on a flight from San Francisco wouldn’t come to the Vail Valley without the direct flight. Those passengers’ spending would end up boosting the town’s sales tax collections by an estimated $75,000 per year.
But, Myers added, the estimates are just that, and there are no guarantees in the air travel business.
“I’ve seen successes and I’ve seen failures,” Myers said. “It’s up to the community to see what kind of stomach they have for (the risk).”
Myers said none of the communities being asked for contributions has said no, at least not yet.
But Avon council members seemed hesitant about pledging the full $30,000. While the council’s big public hearing on the budget isn’t until Tuesday, council members seemed willing to only provide about $6,000 to the program out of a total economic development budget of $50,000.
“I have mixed feelings about this,” council member Buzz Reynolds said. “It does bring people to the valley — I’ll have to think about it.”
Avon resident Michael Cacioppo said he wished locals would get more use from the airport for their contributions.
“I’ve basically quit even looking at prices out of Eagle County — it just doesn’t pay,” Cacioppo said. “I’m not asking government to fix airline prices. But if the taxpayers are going to pay, the governments need to start encouraging the airlines to give something back.”
Steamboat Springs voters just passed a 0.25 percent sales tax that will generate addition money for airline revenue guarantees for ski season flights into Yampa Valley Regional Airport. Steamboat’s winter air program is funded by one-third contributions from Steamboat Ski and Resort Corp., a 2 percent accommodations tax and the new 0.25 percent sales tax.