Question: Are international ﬂights wise?
September 24, 2012
EAGLE COUNTY, Colorado – One of the biggest responsibilities the Eagle County Commissioners have is the care and feeding of the Eagle County Regional Airport. That’s the heart of this week’s question to the five candidates running for the two seats available on the board this fall:
Are you in favor of an international terminal at the Eagle County Regional Airport? If so, what’s the best way to pay for that facility?
I am in favor of the proposed development of an international terminal at our airport. A recent study recognized that the Eagle County Regional Airport has a $982 million impact on Eagle County’s economy. The 10,000 jobs that are tied to the airport make it and related services a huge component of our economy. The international terminal has the potential to increase the number of well-heeled visitors to our county and provide much-needed stimulus to our recreation and real estate sectors.
We should collaborate with the towns of Gypsum, Eagle, Avon and Vail – those that benefit directly from the project, as well as private sector outfits like Vail Resorts and the Vail Valley Jet Center, to finance the cost. It’s also important to work with the airport’s neighbors to mitigate impacts they might anticipate. I have always valued such cooperation, as well as open and honest communication in these matters, and by doing so, we can accomplish this feature of economic development in a manner that will provide the greatest benefit at the lowest cost.
An international airport terminal in Eagle County is a potentially valuable tool for our community. Increased accessibility assists tourism, commerce and the enjoyment of our residents and visitors.
The airport terminal operates from self-generated revenue and provides a surplus. Airport projects are funded by external grant sources with the Federal Aviation Administration’s Federal Airport Improvement Program providing 90 percent of project funding. The Colorado Department of Transportation provides 5 percent, and Eagle County pays 5 percent. These current grants are also potentially available for the expansion to an international facility. External funding sources are beneficial and reduce Eagle County’s financial commitment.
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The county is currently conducting a feasibility study to determine whether the appropriate market exists to maintain the numbers needed for increased FAA funding and exactly what markets would use the airport; the study also predicts what operating costs exist with the implementation of customs officers/facilities and if they are available.
Unfortunately, the study will not be completed until later this year, and it is premature to determine if the operating costs would be offset by revenue to our local economy at this time. If that feasibility study indicates that Eagle County can sustain an international terminal as relates to the operating costs and availability of customs, it is a great opportunity.
Jill Ryan, Democrat, District 1
An international terminal has huge economic development potential. It would permit direct flights from countries such as Mexico and Canada, potentially generating new visits from untapped markets. A 2008 study estimated it could bring upwards of $50 million annually to our local economy. The trick is making the numbers work.
A separate terminal is required for international arrivals, staffed by customs and border patrol agents. Such a space exists that could be renovated for an estimated $2.5 million, instead of a $6 million new building. This is a huge benefit! Once operating, the goal is for the terminal to pay for itself through passenger and airline fees.
A 2013 study will consider whether there is enough of a market to make this venture profitable. If so, I would support the county contributing to the initial capital costs. Revenue bonds are one way to pay for this, incurring no cost to local taxpayers. The county can also identify other funding partners, including regional neighbors that would benefit from such an amenity. It is my understanding that no other winter resort community is providing this type of access.
The short answer is yes, I am in favor of an international terminal.
An international terminal seems like a logical step in the expansion of service for the Eagle County Airport. The upgrade of the runway in 2009 ensures that we have the capacity to handle the aircraft used for international flight.
According to county documents, 7 to 8 percent of passengers, or approximately 16,500 people that use the airport annually are international passengers.
While this may not be an overly large number of passengers, there are other factors to consider in the study of the establishment of an international terminal. When we decide to bid on an Olympic venue in Colorado, having any international terminal that could serve Vail and Beaver Creek would be a plus. Also, growing the international market needs to be a countywide goal
There certainly will be a lot of number crunching to determine the viability of an international terminal. I believe that if the numbers make sense, the county can then approach a public-private partnership with the airlines that would serve this market, the resorts and the towns whose guests will use this service to develop a funding mechanism.
I am very excited about this opportunity. This is an upgrade our world-class resort region deserves.
Commercial service has grown rapidly since building the new terminal in 1996. The flight guarantee program broadened the domestic market into other seasons. This is really the next step.
Vail Resorts and the Aspen Ski Company have shared some of their targeted growth markets, specifically in South America. Greg Phillips, our airport director, is working closely with those entities on aligning a business plan with theirs. The capital cost of upgrading the old terminal is achievable with airport bonding capacity and partnerships. The $3 million cost to build is not the issue.
The challenge both for commercial and charters, primarily through Mexico City, is that a 15-week demand window (winter), means that the operational costs (primarily for federal customs agents) covered by a limited passenger fee needs to meet certain passenger numbers in a short time. The question is really about the risk of not meeting passenger projections and who covers the operational revenue shortfall, especially in the first years while building the market. That is our next discussion.
At the end of the day, the most significant impediment may be the reluctance of the feds to hire seasonal customs agents, or to find a sister market that could use them the rest of the year. That issue could require significant wrangling.