Eagle County air group asks community to step up
January 16, 2013
VAIL, Colorado – The members of a local group that aims to bring air service to the Eagle County Regional Airport are trying a new strategy to raise more money from the community: peer pressure.
The EGE Air Alliance has been responsible for countless flights to the Eagle airport over the years – flights that never would have existed without revenues the alliance has guaranteed to airlines. And with roughly 20 local businesses on average contributing to the pot each year – out of more than 3,000 businesses in Eagle County – the alliance board members have come to the harsh realization that the program isn’t sustainable under the current model.
In order to continue to bring flights to Eagle and to compete with airports in ski destinations like Jackson Hole, Salt Lake City, Montrose, Aspen, Yampa Valley and Gunnison, the alliance needs a lot more than 20 local businesses to contribute to the pot. If the community doesn’t get serious about raising money, alliance members fear the community will be left in the dust by competing resort communities.
And that competition is stiff. The Eagle County community, via the alliance, subsidizes $2.74 per available flight seat while communities like Jackson Hole, Gunnison/Crested Butte and Montrose/Telluride are subsidizing flights at rates as much as 10 times that amount.
“Other communities are spending incrementally more to move the needle forward. Our needle is dropping,” said Chris Romer, executive director of the Vail Valley Partnership, which now oversees the alliance. “We need to step up together across all the different business and market segments in order to build a long-term sustainable plan.”
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Romer put it bluntly at the group’s Tuesday afternoon meeting when he described businesses in the community who haven’t been contributing to the cause. Because every business reaps the economic benefits from flights into the Eagle airport, the number of businesses contributing to the pot needs to rise, he said.
“(They’re) what we lovingly call the freeloaders – the people who say, ‘We’re doing fine, we don’t need this; It’s going to happen anyway, someone else is going to do it; Vail Resorts will solve my problems; Eagle County should do that, it’s their role,'” Romer said. “Everyone benefits, we can’t have any freeloaders. There’s tiers and opportunities for businesses – regardless of size, scale, scope – to be a part of the solution and not the freeloader (with the) ‘someone-else-will-solve-my-problem’ attitude.”
Romer, aviation consultant Kent Myers, of Airplanners, LLC, and alliance board members have created a new way to raise funds. They’ve divided up the contribution levels into tiers based on industry. Examples include restaurants, lodging, transportation providers, retail and banks, among others, and contribution levels range from $500 to $15,000.
With a trend showing declines in flight service at the Eagle airport since the 2009-10 winter season, the alliance also realizes that its future will have to include a public funding source, Myers said. But in the immediate future, the funding source needs to come from the business community.
“People get complacent with this,” Myers said. “(They’ll say) it’s Vail Resorts’ problem. Well it’s not their problem, it’s our problem, and it’s a challenge. And it’s risky business – I’m the first one to admit it.”
Bringing flights to markets like this requires deals made possible through relationships with the airlines – relationships that Myers and Vail Resorts’ Airline Marketing Manager Gabe Shalley have cultivated over the years – but more importantly, the deals are made possible when there’s money to back them up. Vail Resorts funds and markets 100 percent of the winter flight service.
The way it works is that in order for an airline to add a new flight to this market, they need to feel comfortable that the flight won’t lose money. There’s no way to guarantee that a new flight will make money, so the alliance and the airline strike a deal on what the guaranteed revenue needs to be for that flight. The alliance puts up the money to bring in the flight, and whatever money it makes determines how much of that contributed money, if any, if refunded back to the alliance at the end of the flight season.
If the flight bombs, the alliance could pay the entire negotiated sum. If the flight is successful, the payment will be much less. In a perfect scenario, the flight is a screaming success in its first season and makes enough money to cover the airline’s guaranteed revenue, and the alliance pays nothing. In the cases of successful flights, the airlines also eventually stop requiring the revenue guarantee and simply bring in the flights thereafter. The Dallas summer flight on American Airlines is an example of a flight that the alliance subsidized in the beginning but no longer has to.
The alliance is currently looking at bringing in a United flight from Houston for summer service, five days per week. They strategically chose Houston because it’s a major United hub, meaning folks coming in on the nine daily flights from Mexico City, for example, could connect in Houston on a nonstop flight to Vail.
United won’t start loading those flights until they have a revenue guarantee from the alliance. The alliance can’t release those specific figures, but in order to guarantee that Houston flight and cover some other costs this summer, the alliance is looking to raise roughly $500,000. And they need to do it fast.
Beth Slifer, owner of Slifer Designs, said Tuesday she’d put up the $500 on behalf of her business. It’s a small price for such a large economic benefit, she said.
“The (alliance) board has put in so much research and consideration. I trust the board,” Slifer said of the decision to pursue a Houston summer flight.
And many through a little persuasion and peer pressure, other businesses will follow suit. Myers pointed out the attitude in Jackson Hole surrounding its airport’s flight program.
“If you don’t give to the air alliance up there, your kid doesn’t play on the hockey team,” Myers said. “There’s got to be a little bit of peer pressure here, folks. … It’s amazing what (Jackson Hole does) as a community, and we’ve got to shift to that kind of positioning.”
Assistant Managing Editor Lauren Glendenning can be reached at 970-748-2983 or email@example.com.