RTA asked to help with regional attempt to lure ‘low-cost carrier’
Originally published 2012-09-20
With ever-increasing attempts at drawing more visitors, leaders of the Gunnison Valley Rural Transportation Authority (RTA) are considering a concept that would entail spending local tax dollars outside the county.
The Telluride Montrose Regional Air Organization (TMRAO) — a somewhat similar entity to Gunnison County’s RTA — has been making the rounds among local governments in recent weeks, attempting to generate more funding for drawing a “low-cost carrier” to the Montrose Regional Airport.
Friday, TMRAO’s pitch was to the local RTA, requesting $45,000 to help cover part of the program’s cost for this coming winter season.
RTA board members have yet to decide whether it’s a partnership they want to pursue. There are still numerous questions — such as how transportation from Montrose to the Gunnison Valley would be handled, whether the RTA board is willing to commit the funds and whether or not they can even legally do so.
Scott Stewart, executive director of TMRAO, said that the organization is in the midst of negotiations and can not yet name the specific carrier that would provide the service.
But the concept would entail service from two major metropolitan cities “west of Montrose.” Neither market currently serves Montrose, he said.
It’s hoped that the program can be extended into summer, if successful.
“They’re also attractive areas,” he added, which he believes will also benefit locals looking to travel at a cheaper rate. “There’s a leisure demand in those areas.”
Stewart said the unidentified carrier’s aircraft can not fly in or out of the Gunnison-Crested Butte Regional Airport, due to technical requirements for the planes.
Also, he said that the carrier tends to average more than a 90 percent “load factor” — or seats filled.
“That alone means that whatever we’re spending on a partnership basis, it’s going to hopefully produce a good return on investment,” he said.
Low-cost carriers are known for offering significantly cheaper fares than larger airlines — with fewer bells and whistles on flights and typically higher density loads.
For folks who have been priced out of ski trips to, say, Telluride or Crested Butte, “this is one piece that could help in getting some of those folks back,” Stewart indicated.
Unlike maximum revenue guarantees that groups like the RTA and TMRAO typically pay for covering airlines’ operating losses and thereby enticing them to fly to resort towns, plans for the low-cost carrier would entail a slightly different set of expenses.
The expected total budget for the project is at least $650,000, which TMRAO is attempting to cobble together. Most of the dollars under the agreement would actually market the program, with only a small amount planned to cover “risk mitigation,” Stewart said.
In addition to the $45,000 commitment asked from the RTA to help cover that expense, an additional $105,000 is being asked from Gunnison County entities for marketing. Where that money would come from is still unclear.
Talks of the possible partnership began between TMRAO and Crested Butte Mountain Resort (CBMR).
Jeff Moffett, CBMR’s director of Crested Butte Vacations, said that regionalization is currently a trend in the airport industry amid higher fares and fewer passengers.
He noted that seats into Gunnison have declined more than 30 percent in the last five years.
“I think it’s had a negative impact on Gunnison County’s economy,” he said. “The question we really have to ask is, ‘How are we going to get people into the county?’ If there’s not as many seats into Gunnison, seats into Montrose is one way.”
While the RTA board opted this past spring to pass on guaranteeing flights into the Montrose airport as part of a five-year planning process, some see the low-cost carrier concept as a different proposition.
Still, the question of whether local funds should be allocated outside the county is likely to be at the root of talks among the RTA board about the idea.
“There were more questions than there were answers from the board,” Gunnison Mayor and RTA board member Jonathan Houck said. “But I don’t think it’s something that we can just shrug our shoulders and say we’re not interested.”
Should the board agree to the partnership, RTA Executive Director Scott Truex indicated that the money would come from the sales tax-funded entity’s reserves. RTA’s unrestricted fund balance is projected to be $324,000 by year’s end, and $445,000 by year-end 2013.
However, the board has adopted a policy of attempting to keep the fund balance in excess of $400,000, said Truex.
Board members Friday directed Truex, consultant Kent Myers and Chair Chris Morgan to further study the feasibility of the partnership in coming weeks.
While TMRAO is hoping for a decision quickly from the RTA, it’s not yet clear when it might be made.
“We are going to have to as a community begin to get more resourceful about the ways we bring people to the area — whether it’s hunting, skiing, fishing or summer time activities,” Morgan opined. “Or else we’re going to fall behind. We have to look at all opportunities out there and carefully evaluate them, whether it’s public or private resources.”
WSCU chips into airline program
In related news, an $89,000 revenue shortfall for this coming winter’s local airline program has been covered.
Western State Colorado University committed to covering the remaining $9,000 after four local government entities chipped in a combined $80,000 to fill a shortfall of funding for the 2012-13 winter season’s revenue guarantees.
RTA Director Truex said the commitment was extended by President Jay Helman in recent weeks.
As a result, the Gunnison Valley will see service to Gunnison from Houston and Dallas on United and American airlines, respectively, similar to last year — with a few minor tweaks. The RTA does not pay guarantees for daily service from Denver on United.
(Will Shoemaker can be contacted at 970.641.1414 or firstname.lastname@example.org)