The CEO of Frontier Airlines said Monday he’s pleased with the level of business the airline is seeing on its new flights to Aspen, but he expects ski business to be down this winter in Colorado.
“I couldn’t be happier with the performance over the summertime,” said Sean Menke, the president and CEO of Denver-based Frontier, about service to Aspen. “It surpassed my expectations.”
Menke spoke Monday at the Aviation Forecast Summit being held at the St. Regis Resort Aspen, which has brought about 250 airline and airport executives to town.
Frontier started service to Aspen from Denver in late April on its new subsidiary, Lynx. It ran five flights a day throughout the summer and is now running four flights a day.
While Menke, 39, said he is pleased with the early advance bookings to Aspen for this coming ski season, he also told the conference that early bookings to Colorado ski areas were down compared to the same time last year.
“That demand is not going to show up to the degree that they need it to,” Menke said of the state’s ski areas. He noted that ski areas, especially Aspen, “are not cheap leisure destinations.”
“Everybody is seeing some of the weakness out there,” he said.
Menke referred to a Sept. 25 quarterly earnings report from Vail Resorts when CEO Rob Katz gave a less than optimistic forecast to Wall Street analysts.
“As an update on our season pass sales and lodging bookings for the upcoming season, we have certainly begun to see the impact of the current economic softness during these unprecedented times,” Katz said. “Advanced bookings through our central reservations and directly at our owned and managed properties are down 13 percent in sales dollars and down 17.7 percent in room nights over the same period last year.” Katz did point out that bookings to date only represent 15 to 20 percent of Vail Resort’s eventual winter business.
David Perry, a senior vice president at Aspen Skiing Co., recently said that early season and late season bookings are low, but, on the bright side, noted that season pass sales are up.
He also said that Aspen’s air service was strong for the coming season while other markets have been losing service.
Bill Tomcich, president of Stay Aspen Snowmass, told the conference that airlines actually make money flying to Aspen as passengers “pay a fare premium,” in part because of how close Aspen’s airport is to the ski areas.
“Airlines run in the black here,” said Tomcich, who is hopeful that a pending merger between Delta and Northwest airlines will mean additional service to Aspen.
Menke said that as airlines have cut the number of flights they are operating, some leisure markets are feeling the pinch, especially as group conference business is softening in the wake of the national economic downturn.
In addition to its Aspen service, Frontier recently added service to Steamboat and also serves the Durango and Grand Junction markets with its new Lynx service, which features pictures of young wild animals on the tails of its Q400 turboprop planes.
Frontier, which is working its way out of bankruptcy, is considering purchasing another Q400 from Bombardier of Canada to add to its current fleet of 10 such planes, which can be configured to carry between 70 and 74 passengers.
Menke said the turboprop planes are quiet and fuel efficient. He also said the “break even load factor” for the planes is “relatively low.”
While Menke is bullish on service to Aspen, he and other airline executives are well aware of the challenges airlines are facing in today’s economy.
Mike Boyd, head of conference host Boyd Group International, said the air transportation sector is “under financial siege,” especially as it relates to high fuel and labor costs.
Tomich said Boyd’s best insight of the day was that “the cost of an airline ticket is no longer going to get you where you need to go, it is a down payment on the cost of getting you and your stuff there” — referring to baggage fees and other costs.
For example, United Airlines now charges passengers $15 for their first bag, $50 for a second bag and $125 for a third bag. And that’s one way. The fees mean that a skier coming to Aspen, who would not look out of place carrying two big duffle bags and a ski bag to an airline check-in counter, might see $380 in baggage charges on a round-trip flight.
On Monday, Vail Resorts announced a “Baggage Bailout” promotion, saying it would give guests a $50 credit to offset airline baggage charges if they booked a four-night lodging and lifts package with the company by Dec. 1.
bgs@aspendailynews.com
