Wednesday, October 24, 2012

Partnership is essential to secure air service


I don’t say this lightly, but it is true: Air service is the top priority of the Sun Valley Resort for our future success. Over the past several decades, the Holding family has demonstrated exceptional stewardship of the Sun Valley Resort, investing millions of dollars to enhance it—from building one of the world’s most sophisticated snowmaking systems to ensure a consistent ski season, to creating the magnificent Sun Valley Pavilion, which has increased Sun Valley’s stature as a major cultural destination. All of these enhancements to the resort have also benefited the community at large.

The same is true for marketing. Our extensive efforts to attract visitors, convention groups and events benefit both the resort and the community. These visitors stay in hotels and condos, patronize retail stores, restaurants, galleries, recreation providers and special events, rent cars, take taxis and more. We are glad that our community offers such an exceptional array of experiences for visitors and that the benefits are shared by all. 

The same applies to air service. The Sun Valley Resort is committed to being a 50 percent minimum revenue guarantee funding partner to support air service, and we will continue to put marketing resources toward bringing in new visitors on those flights. Sun Valley Resort has subsidized service for more than 30 years, which has certainly benefited the resort and the community.

Initially, we subsidized seasonal flights from Chicago and the Bay Area to Twin Falls. These air access options went away due to a combination of increased cost and change in skier travel patterns. In 2003, we partnered with the Blaine County Air Transportation Advisory Group (the precursor to Fly Sun Valley Alliance), and the airport owners to secure a USDOT grant for nonstop flights from Los Angeles. Nonstop service from L.A. continues to this day because we underwrite it, along with the flights from Seattle. The Seattle flights used to run year-round and did not require an MRG, but as the recession hit and costs escalated, our key airline partner, Alaska/Horizon, was no longer willing to fly here without less financial risk, hence an MRG requirement for seasonal service. 

The economic challenges facing the airline industry dictate that carriers serve the routes most closely aligned with their strategic and financial goals. The airline consultant for Fly Sun Valley Alliance, who assists in developing pro-formas for potential service and in the actual MRG negotiations, has over 30 years of executive airline management experience and knows the industry and the players well. The reality is that seasonal destinations like Sun Valley, and our many competitors (Steamboat, Jackson, Telluride, etc.), are unable to secure nonstop major market service without sharing the financial risk through MRGs. Most of our competitors have much stronger air service access because they have developed successful programs based on a private-public cost-sharing mechanism in which the ski resort is a strong partner. I believe a similar partnership is essential for continued economic success in our community.

We have had a very successful partnership with Fly Sun Valley Alliance for the past 10 years in securing and retaining our current nonstop flights. We have been in discussions for over a year with an airline that is interested in bringing new flights here from San Francisco and other destinations, but we need the resources to make that happen. We need to seize this investment opportunity now to reach new markets and new customers with more flights and more marketing in order to build a better future for us all. I urge you to vote “in favor” of the 1 percent LOT for air service.

Tim Silva is the general manager of Sun Valley Resort.

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