Eagle County group seeks contributions for airline revenue guarantees
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.
Comments
BeCoolHoneyBunny 1 year, 6 months ago
“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).”
We'll see what kind of stomach Steamboat has if our new tax fails to bring in more filled seats. Or even worse if this tax reduces spending in town.
Guaranteed revenue? Doesn't seem right to me.
Scott Wedel 1 year, 6 months ago
But we don't have the issue of risk up here. Chamber CEO in letter to editor made it clear that it would bring 44,000 additional tourists and $44 million to the local economy.
steamboatsconscience 1 year, 6 months ago
I priced out flights from SFO : SFO to DIA around $350 SFO to HDN $650 thats our thanks for subsidizing ski corp. BS.
steamboatsconscience 1 year, 6 months ago
Update just checked again same flights are now from $800 to $1200. Wow.
mavis 1 year, 6 months ago
Thinking as long as Eagle doesn't pass this I will increase my shopping at COSTCO!! They have a great store, fresher produce and it is great for my family. Shopping "local" in Steamboat is now just for immediate services, trash, gas (occasionaly), immediate home repair ie.. plowing, electric, propane and other necessities. The rest of the stuff can EASILY come from Eagle or Craig with a little increased organization and it will save my family $$$, time and frustration!! THANK YOU STEAMBOAT for helping me get better organized with our daily needs and saving money!!
BeCoolHoneyBunny 1 year, 6 months ago
I don't believe the airline program's goal is to make flights cheaper. Instead it's to increase flights (seats) by guaranteeing revenue to the airlines.
SFO to HDN in December as low as $422 SFO to HDN after December as low as $319
Not sure where your looking conscience, try kayak.com or expedia.com
BeCoolHoneyBunny 1 year, 6 months ago
http://www.kayak.com/flights?uselast=true&of=y#SFO-HDN/2012-01-01-flexible-calendar-0/2012-01-31-flexible-calendar-4to7
steamboatsconscience 1 year, 6 months ago
becool I had to book for the Christmas vacation, look at prices from 12/18 to 1/1. So the subsidized prices must not go into effect until after the holidays. Plus none of the flights are non stops (during the Christmas period) you still have to connect through Denver.
BeCoolHoneyBunny 1 year, 6 months ago
Really? Obviously you are trying to fly during the busiest time of the year for the airlines and for steamboat, literally. Plus you're just over a month out from when you want to travel. And you want to fly out on a Saturday. Don't expect to get a discount. Be serious.
Anyway just looked again.
$524 to depart from SFO to HDN on 12/18. From 12/29 through Feb. prices are in the $300's. Not too bad.
Like YVB said, subsidized prices is not what the airline program is about. Ski Corp. does negotiate with airlines to offer discounts during certain times of the year, but mostly it's about increasing the amount of seats coming into HDN by guaranteeing revenue to the airlines. And those discounts are probably part of a package deal through Central Reservations.
Requires free registration
Posting comments requires a free account and verification.
Or login with:
OpenID