Rob Perlman: Winter air program news

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With just a month to go before we welcome winter flights from nine nonstop cities, I wanted to share some positive and exciting news regarding this year’s winter air program.

We were able to increase load factors for contracted flights, even while the combination of recession and consolidation in the airline industry led to a reduction of total incoming seats last winter. As a result, we were able to lower our costs per seat and rebuild the Local Marketing District reserves to $1 million. Thanks to these successes, Steamboat was able to negotiate significant enhancements to this winter’s air program, including:

■ New airline partner and nonstop flights on Alaska Airlines from Seattle

■ New Chicago flight Saturdays onboard United Airlines

■ Los Angeles adds third day (Thursday, Saturday and Sunday)

■ Bigger aircraft to Houston and Newark on Saturdays

■ Capacity gains during peak periods

■ Saturday seat capacity up 21 percent, the highest Saturday seat availability in five years

For the 2013-14 winter, we feel we have been able to more accurately align demand with capacity throughout the season, supporting our strategy of maximizing every dollar invested in the program. It’s all about increasing visitors for the community.

All similar regional airports are facing increasing costs relative to winter service. While there is no silver bullet, Steamboat’s success is the result of our cooperative strategy and our model is sought after or emulated by other organizations.

Kent Myers, president of Airplanners, LLC who consults with other resort communities including Vail/Eagle, Gunnison, Montrose and Mammoth, said “All small mountain communities are challenged when it comes to air programs. Steamboat’s winter air program is strides above the rest proven by the recent addition of new routes and partnerships with Alaska Airlines and adding additional service on previous popular routes such as LA and Chicago. Steamboat’s solid relationships with airline partners allows them to weather the storm as airlines merge, raise costs and change their business plans.”

Equally important to the Steamboat Air Program is an aggressive marketing effort to send out the word about easy air access into the Yampa Valley. Strong relationships between the resort and the airlines allow us to create special airline products unique to Steamboat, such as the recently announced fare sale from 37 markets across the country. We utilize geo-targeted emails and online advertising to communicate with past, current and prospective visitors in key air markets.

During the past 27 years, we’ve seen it takes a lot of work from a wide variety of entities across the entire Yampa Valley to be successful. For Steamboat, the goal remains the same — maintaining a diligent and responsible fiscal management outlook (more than two decades experience), leveraging established relationships with industry air executives and implementing innovative marketing programs.

Thank you for your support of the winter air program and ensuring Steamboat shines for our nonstop guests.

Sincerely,

Rob Perlman

Senior Vice President of

Sales & Marketing

Comments

Scott Wedel 10 months, 2 weeks ago

Anyone that is such a believer that they drink the Kool-aid and believe Kent Myer's quote which includes "... Steamboat’s winter air program is strides above the rest .." also goes to a rock concert and believes the local audience is the best ever.

It is ridiculous to suggest that SB's air program which has had to pay increasing subsidies for decreasing numbers of seats is strides above Vail's program which costs them nothing because they make their revenue targets.

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scott bideau 10 months, 2 weeks ago

My concern is that around $50,000 in tax money goes to Ski Corp for administering the air service program, yet the data on why certain routes are chosen or the details of each contract aren't made public. Now that tax money is used for the guarantees, shouldn't we be choosing routes that benefit the entire community and not just the resort? That may be happening already, but we can't know for sure without understanding the analysis performed for each route.

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Michael Bird 10 months, 2 weeks ago

 Until the air program actually becomes revenue efficient, it will be an anchor for local residents.  Empty seats are zero revenue. Every discounted price seat sold to locals is less tax $$$$ that needs to be paid. Unsold seats can be sold for flights during the week which are almost always partially empty. I have been on many flights to Houston where the plane was less than half full.  Many time less than 1/4 full. Karl and Ron do nothing for those who live in our community. The question is why ????
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Scott Wedel 10 months, 2 weeks ago

If you sell standby seats for too low of an amount then people won't pay a lot to purchase seats. You can't be giving something away and expect other people to pay for it. Everyone will get into the freebie line.

But that is why the airlines have so many fares that constantly change. They offer lower cost fares for early purchase to fill a bunch of seats. They have expectations of how many will buy a couple weeks out, a week out, a few days out and that day. All the way along they are offering a certain number of seats at a price. If the seats aren't selling then they drop the price to sell the seats.

With revenue guarantees comes the responsibility for setting prices and for a plane to be a quarter filled indicates a failure to do it properly.

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scott bideau 10 months, 2 weeks ago

Keeping in mind that we can't change the airline industry's practices (sell discounted tickets to locals), what we can do is choose routes and providers intelligently. Data exists to help estimate each carrier's cost versus revenue per seat mile on a per route basis to better choose which routes and which providers we ask to fly here. Choose a better route or a better provider and your revenue guarantee liability might go down.

Maybe JetBlue would be more efficient from NYC than United. Maybe the NYC route altogether is good for Ski Corp's profits but bad for the community tax money backing the revenue guarantees.

Until the process is completely redesigned to give more transparency to and put more power in the hands of the community (not just Ski Corp), we won't know if it's optimized. I would love to work with others to perform that optimization, but if it doesn't happen - I and many others will be leading a campaign to ensure the 0.25% sales tax as it's currently designed expires after the initial 5-year term.

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Roy Powell 10 months, 2 weeks ago

The basic principal of an effective air program is to consider the best hub airlines/cities where connections from large geographic areas can be created. Related to this is promoting Steamboat to people who ski/board. This was done to better effect in the genesis of our program. Now due to convoluted airline realities, the best negotiated price does not always yield the most skiers/boarders, therefore lots of empty seats. The west coast program with Alaska Airlines, which is weak in connector flights, and L.A., which is weak in skier/boarder populations are examples of this dynamic. The largest population of skiers/boarders in California are in Northern California where Steamboat is one of the most popular destination resorts – but no flights! Another challanged market is upstate New York where promotions and connection packages are inconsistant. These areas are chuck full of enthusiastic, dedicated skiers/boarders who have sub-par skiing/boarding options at home and would love to taste our champagne powder, if they only could.

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mark hartless 10 months, 2 weeks ago

"You can't be giving something away and expect other people to pay for it. Everyone will get into the freebie line."

That simple truth which Scott put so well is precisely what's going to be the undoing of this nation.

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