American Airline’s Success in Crested Butte

Good morning Crested Butte Real Estate Letter readers,

Good news from the Rural Transportation Authority (RTA) was reported by the Crested Butte News this past week. Laura S. Freeman’s article recaps this past ski season’s success with bringing American Airline’s jets to Gunnison and Crested Butte. For the 2005-2006 winter season, we saw 23,000+ passengers arrive into Gunnison on RTA subsidized jets. This number does not include the regional prop planes that carry skiers into Gunnison from hubs like Denver International. This is a good sign and will help the RTA negotiate better deals with American Airlines and United Airlines for the 2006-2007 ski season.

Enjoy the article courtesy of the Crested Butte News.

Channing Boucher

RTA reports success of American flights

May expand next year’s contract

An ambitious contract with American Airlines, which guaranteed thousands more airline seats into the Gunnison airport this past season was a success, according to a local transportation board.
The result could mean an expanded contract on the flight from Dallas—and less risk—for next year’s season.

"This has been a very successful program," said Scott Truex, director of the Rural Transportation Authority (RTA), a board that was organized to help promote air and ground transportation in the Gunnison Valley.

The RTA was created through a voter-approved tax increase in 2002. The RTA uses its approximately $1 million budget to guarantee revenue to airlines in case they see low booking, to help entice jets to the small local airport.

In early summer 2005, the RTA signed a contract with American Airlines to bring a 188-passenger 757 to the Gunnison-Crested Butte Regional Airport from Dallas approximately 118 times over the course of the 2005-2006 winter season.

In the contract, the RTA promised to pay the airline up to $600,000 in guarantees. At the time, the contract meant 20 percent more seats to fill in the 2005-2006 winter over the previous year. During a meeting of the RTA on Friday, April 7, the RTA board heard the organization will likely pay only a third of the maximum guarantee promised to American Airlines.

The number of seats booked from Dallas on American Airlines also means that the RTA will pay less than half of the guarantees paid out for the sum of last year’s Texas-based flights from Dallas and Houston, according to Kent Myers, an airline consultant to the RTA.

Myers said the American Airlines flight meant carrying 15,000 people from the Dallas link to Gunnison during the 2005-2006 winter season. "It’s a very successful program, it really is," he said. Overall, this year’s guaranteed jets—the American Airlines jet from Dallas and a daily United Airlines jet out of Denver—resulted in 4,000 more passengers arriving in Gunnison than the previous winter. The number of passengers flying into the airport on guaranteed jets comes to approximately 23,000 for the winter, Myers calculates in early projections.

Those numbers do not include small, Dash-8, United Express 32-passenger commuter planes that also fly in and out of the Gunnison-Crested Butte Regional Airport year-round.

Myers says that conversations about next year’s American Airlines flight have already begun with the carrier. Next year, the flight could expand to include an additional weekend flight, bringing the 757 eight times weekly to Gunnison. Also, the airline has offered to reduce the guarantee to $500,000 for next year.

The 2006-2007 season of American Airlines flights is scheduled to run from December 15 to April 10 and, according to Myers, may include a special "locals fare" for certain outbound flights to keep bookings high.

In addition, Myers said talks may also include weekend flights from additional cities. Possibilities include Miami, LaGuardia, or Newark Liberty international airports.

News of strong air travel bookings also came with two sizable bills—a $13,000 fuel surcharge to cover the airline’s increased fuel costs, and a final charge of nearly $68,000 in start-up fees. American Airlines returned to Gunnison after the airline sold its equipment and left the airport in 2002. In December 2005, the RTA board discovered that the contract signed between the organization and American Airlines left the RTA open to almost unlimited extraneous costs.

In the shadow of the success of the American flight, the daily United Airlines airbus out of Denver attracted less favorable reviews from the RTA board and members of the community at the RTA’s April 7 meeting. Complaints included selling seats at a higher cost, offering a lower level of customer service, and losing luggage.

Victoria Johne, representing Club Med to the RTA’s citizens’ advisory committee, said, "At one point, it was 60 bags in one week," for Club Med visitors’ lost luggage.

Jeff Moffett, representing Crested Butte Mountain Resort to the advisory committee, said he has communicated United’s slip in popularity in the Gunnison market to airline officials. "I told them point blank, ‘You lost market share to your competitor,’" he said.

"It sounds like we have an education campaign with United," said RTA chair Chris Morgan.
No guaranteed jets are scheduled to fly in or out of the Gunnison-Crested Butte Regional Airport during the spring and summer seasons.

United Express (Mesa Airlines) 32-passenger commuter planes will arrive at the airport twice daily during the spring, and four times daily during the summer.

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