Our View: Riding the turbulence to calmer skies

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Editorial Board, January to May 2013

  • Scott Stanford, general manager
  • Brent Boyer, editor
  • Tom Ross, reporter
  • Randy Rudasics, community representative
  • John Centner, community representative

Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com. Would you like to be a member of the board? Fill out a letter of interest now.

Periodic flight performance issues aren’t new at Yampa Valley Regional Airport in Hayden, and to a degree they should be expected given the regional status of the airport, the types of planes that are brought here and the challenging weather conditions of Northwest Colorado. But the consistently subpar performance of United Express’ Denver-YVRA leg during the past few months has cast a pall over the operation of the airport and certainly the impression of the unfortunate travelers who have fallen victim to the late and canceled flights.

Adding insult to injury is the money this community pays to airlines like United to guarantee minimum flight revenues for the planes flown into the Yampa Valley throughout the course of the ski season. This Editorial Board has been a supporter of the flight program and the additional city sales tax that was approved by voters in November 2011 to generate more money to try to keep the flights coming. One of our concerns with the poor performance of this particular United flight is that it has the potential to significantly impact public support of the air service program, and thus could reasonably jeopardize future taxpayer support when the new sales tax expires in four short years.

Of course, there are other legitimate concerns. We’ve often written that YVRA provides the first and last impressions of Steamboat Springs for many visitors to our valley. It’s not hard to imagine what that impression might be when your $10,000 family ski vacation was disrupted on one or both ends because of a poor travel experience. We’ve also written much of late about the growing significance of location-neutral workers to our economy. Those members of our community are among the most frequent fliers out of YVRA, and certainly on the late-evening Denver to YVRA flight operated by Republic Airlines on behalf of United Express. It’s that flight in particular that has been the worst performer since last fall, often arriving hours after its scheduled 10:19 p.m. arrival in Hayden — if it even leaves Denver at all. The issues seem to be related to Republic’s operations and its ability to scramble together flight crews, not with the aircraft itself.

It must be noted that the United flight at the heart of the issue isn’t one for which the community and Steamboat Ski and Resort Corp. pay revenue guarantees. But that won’t be the takeaway from a frustrated flying public.

United Express officials, at least one of whom was in Steamboat last week for the annual Airlines Partners Summit, said they’re aware of the issues with the service and the need for improvements. We hope they’re sincere.

The unfortunate reality is that we, as a community, have no leverage when it comes to working with the major air carriers. The annual negotiations between Ski Corp. and the airlines are done with honey, not hammers. That reality leaves Ski Corp. and Local Marketing District officials in an unenviable position. They must figure out how to push hard enough on United to improve service to YVRA without further jeopardizing future incoming passenger seats. We hope they’re successful, because the future of sales tax support for the air program, fair or not, might depend on it.

Comments

Dan Hill 1 year, 9 months ago

The future of the air services tax isn't a matter of fair or unfair. This isn't grade school, it's the real world. It's simply a matter of value for money. Spending more and more for less and less is not a smart (or sustainable) strategy. Time to rethink the whole program from the ground up. We ought to begin by asking the right question, which is not "how can we maximize the number of skiers between December and March?" but instead "how can we maximize the economic impact year round for the whole community?" If we ask that question we would be looking at quite a different air program.

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Kevin Nerney 1 year, 9 months ago

Careful Dan, this space is not normally reserved for those that make sense and have anything intelligent to say.

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Scott Wedel 1 year, 9 months ago

Sad to see that the airline subsidy program is proving the critics correct.

The well run airline flight programs, such as Vail Resorts, fill the seats resulting in the airlines wanting to fly those routes. Poorly run programs like SB buy empty seats resulting in the airlines wanting to cancel near empty flights.

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Steve Lewis 1 year, 9 months ago

  1. List item

I'm with you Dan. The subsidies given to long-haul flights directly undermine the viability of the free market regional flights to Denver. Frontier might still be competing in that free market except for our subsidy. We are pursuing distant skiers at a cost to the natural business markets that could make us more stable economically and advance our long term prospects.

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Scott Wedel 1 year, 9 months ago

Steve,

I'd suggest hiring a truth telling economist like Scott Ford to research what can be expected from airline subsidies and how it should be managed. There is not enough public data for this valley to have any idea of whether our program is effective.

Vail Resorts clearly has a successful program which they operate completely differently than SB. Vail Resorts openly states it is a top priority to fill the seats they guarantee and so they don't pay the airlines for empty seats.

We are spending way too much taxpayer money on airline subsidies to simply be trusting that Ski Corps is doing a great job. Especially, when the public was PROMISED 140,000 tourists and instead we didn't even get close to that number of seats.

It would be just as reckless and inept to switch to any other use for the subsidies. Business decisions are supposed to be made based upon information and include measurable expectations. Let's get some data and some metrics so we can decide what is expected to work and whether it is working.

But this is SB and Ski Corps so no one can ever get any answers.

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Steve Lewis 1 year, 9 months ago

I disagree with the editorial in two regards.

The first is small. We do subsidize the United flights, though in much smaller amounts. As I understand it they get some subsidy in fuel to fly jets here rather than props.

Are we headed for calmer skies? Not by any conceivable logic I know of. Does anyone else have that logic in hand?

If you review the air program numbers since 2008 you will find a very steady trend. Carry that same trend forward to the sunset year of the air tax - we would put just over $8 million on the guarantee table to secure the same number of seats that come here today, about 111,000 seats.

I established this cost and the LMD numbers behind it in a 2012 letter to City Council as they adopted the 2013 LMD budget. My request was simple: the City should require LMD air program budgets to project expected performance several years into the future.

The City opted to live with a 5 month projection which amounts to the LMD repeating the air contracts numbers they negotiated the preceding March. Calmer skies? More like we expect turbulence and the City has decided to ignore the weather forecast.

They should know better.

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Scott Wedel 1 year, 9 months ago

Steve,

Well, problem solves itself since the tax expires on its own in a few years.

Should be obvious that only way to operate a flight subsidy program is like Vail which is to use the revenue guarantees to get the flights which then Vail Resorts makes sure are filled so that guarantees are met. So then Vail Resorts gets the guaranteed money back.

The SB model of looking to see how much the airlines will charge for a particular flight and then expecting to have empty seats is going to cost more to get fewer and fewer seats. The airline industry because of fuel costs and consolidations is run on a business model of increasing revenues per available seat.

The airline subsidy tax is looking like a mistake allowing Ski Corps and the Chamber to continue a failing policy instead of reforming to what will work in the future.

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Steve Lewis 1 year, 9 months ago

I expect a vigorous campaign to continue the air tax past that sunset year. No doubt it will be presented again as avoiding an economic cliff. That will in part be correct, because the program is not doing what it's proponents said it would do - rebuild reserves. instead LMD policy is to commit every dollar every year. But by then the cliff will be smaller because of the inflation you mention, and the toll on seats delivered.

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jerry carlton 1 year, 9 months ago

Sad part is a majority of Steamboat residents will pass it again.

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Scott Wedel 1 year, 9 months ago

Jerry,

Next election is going to be far harder than last election. When Mr Kern, Chamber CEO, runs an ad campaign stating the airline tax will deliver 140,000 tourists a year to SB and that number will be increasing then it is hard to argue that isn't worthwhile.

But when it actually bought only 110,000 seats and probably around 80,000 tourists then it is far less worthwhile. Especially, since we are big to probably support 50,000 passengers on the Denver-Hayden shuttle flights without subsidies.

And the number of additional seats the subsidies will be able to bring in are expected to decrease year after year.

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