Steamboat airline program still pursuing service from cities like Phoenix, Charlotte, Detroit
July 18, 2014
Steamboat Springs — The Steamboat Ski and Resort Corp. announced July 1 that it had reached agreements with United Airlines to bring new direct ski season flights from Washington, D.C.-Dulles and San Francisco to Yampa Valley Regional Airport on Saturdays this winter. On Friday, Ski Corp. Senior Vice President of Sales and Marketing Rob Perlman revealed that his company also has looked into new flights from airline hub cities including Philadelphia, New York, Charlotte, North Carolina, Detroit and Phoenix.
"Every season we look at every possible expansion into a hub market," Perlman told the board of the Local Marketing District. "Our schedule (for winter 2014-15) is still fluid. There are a few opportunities out there, but they are probably less likely to happen at this point."
The LMD board is the advisory panel that oversees airline contracts secured with a mix of dedicated public tax revenues and private dollars on behalf of Steamboat Springs City Council acting as the Local Marketing District.
Bill Stuart, acting in his last LMD meeting as the board's treasurer, had some good news for his fellow members: Airline costs for ski season 2013-14 finished at $2.9 million, $1.8 million below the caps — or maximum revenue guarantees of $4.8 million the LMD was committed to paying.
Stuart will remain on the board and Lisa Sanchez Warner will take his place as treasurer.
Perlman reminded the members of the LMD board that Ski Corp.'s attention is focused on contracting for new airline seats during periods of peak demand — weekends and holidays — from hub cities.
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"It's important to know that we explore every possibility from new partners and we look at hub cities," Perlman said. "We are a hub and spoke model. The rule of thumb is that 50 to 60 percent of our traffic will be generated from the hub city, and 40 to 50 percent comes from beyond the hub” via a connecting flight.
However, Perlman did acknowledge that Ski Corp. executives have had discussions with Southwest Airlines, which has a rapidly growing presence at Denver International Airport, but is not a hub airline.
"They are a point-to-point model," Perlman said. "We've had conversations with Southwest, but we're not at a point to start a program with them quite yet."
Perlman said that when ski area executives approach major airlines about the possibility of securing service from a new hub, they can receive a variety of reactions.
On the downside, the airline might just say "no," Perlman said, or they might point out that based on their own data, a particular new hub might hurt traffic numbers at another hub already serving the Yampa Valley. He added that another possibility is that they come back with a proposal that is too expensive for Steamboat to consider.
But there are other times, when, for competitive reasons, an airline is not only willing to serve YVRA, but willing to do so without asking for a minimum revenue guarantee to secure the flight, as is usually the case.
Perlman reminded the LMD board that United operated seven flights on specific Saturdays from Chicago O'Hare last ski season without requiring guarantees. And although American Airlines already is working with Steamboat to provide guaranteed flights from Chicago, United is planning to expand the number of its un-guaranteed flights from Chicago this winter from seven to 27 flights operating on Saturdays and Sundays.
LMD board member Rod Hanna who is familiar with airline negotiations from his prior role with the ski area, asked Perlman what American's reaction has been to United cherry-picking choice ski season weekends on the Chicago route.
"The reaction wasn't very positive," Perlman said. "But they understand that it's a competitive business, clearly, and we're not under contract with both airlines, so we let those guys duke it out. It's a delicate balance there, and American understands we aren't under contract with United."