Steamboat Springs Preliminary figures suggest the financial performance of Steamboat’s ski season airline program will finish stronger this year than last even though the number of travelers on the jets is down.
Chuck Porter — co-chairman of the board of the Local Marketing District, which oversees the flight program — said Friday that the average load factors on the aircraft and the revenue they generate are up. If the numbers hold, Porter said, it could mean the airline program won’t reach maximum revenue guarantee caps of more than $4 million committed to the airlines and won’t have to dip into reserves to pay the tab.
“It was good to get the load factors up and to realize somewhat of a reduction in caps,” Porter said. “It could set the stage for a little better negotiating position for next year. There’s a chance we might even return some money to the reserve fund.”
However, figures provided by Routt County show that throughout December, January and February, the total number of travelers arriving on commercial aircraft at Yampa Valley Regional Airport was down 6,784 from the same three months last ski season, when 49,888 people arrived. Those figures include flights from Denver that aren’t part of the airline program and reflect the loss this winter of a daily flight on Frontier Airlines.
The revenue guarantees paid to the airlines in 2011-12 were about $3.5 million, a major step up from the previous record of $2.6 million in the season of 2009-10.
Program officials attributed some of that to consolidation in the airline industry — airline mergers and fleet reductions as well as escalating fuel prices in the midst of the four-month program.
Steamboat’s airline program is funded by a mix of private (primarily Steamboat Ski and Resort Corp.) and public sources in the form of a 2 percent lodging tax and a 0.25 percent general sales tax.
Ski Corp. pays the first 50 percent of the cost and has promised to backstop any shortfalls.
Porter said the improved financial performance could make it easier for Ski Corp. officials, who negotiate the contracts, to make their case with the airlines for winter 2013-14. He expects they’ll explore the possibility of signing two- or three-year contracts in an effort to temper some of the season-to-season uncertainty involved in renegotiating contracts annually.
When the season is over next month, the airplanes are expected to have operated at 70 percent of passenger capacity, commonly called load factor. That’s up from 63 percent in 2011-12. And the yield from the flights also is up, according to Porter.
The new Saturday/Sunday service from Los Angeles this winter was more successful than expected, Porter added. And as hoped, travelers from Australia played a significant part in that success. One possibility is studying the addition of a third day of round-trip flights to Steamboat from LAX, he said.
In spite of the trend to higher cost for the airline program in recent years, Porter said the board would continue to look at opportunities to add new routes serving new cities. At the same time, Ski Corp.’s Airline Program Director Janet Fischer continues to match flights and the capacity of aircraft to demand to cities where they originate, he said.
“I think there was aggressive yield management going on (this ski season), but for the community, it’s more important to get the bodies in the seats,” Porter said. “That’s probably the first priority.”
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com