Joe Skier wants to fly his family to the mountains for a vacation, and has surfed the Internet until he found airline fares he can afford. But then, he calculates the costs for each family members suitcases, boot bags and ski bags. Its nearly $200 per person, adding another $800 to the trip for a family of four.
Will anybody be able to afford it with all the fees tacked on? mused Mike Boyd, co-founder of The Boyd Group, an Evergreen, Colo.-based company that focuses on consulting, research and analysis of aviation trends. If I buy a ticket, I should have the reasonable expectation of being able to bring my underwear.
Yet, window seats are selling for $10, a cup of water goes for $2 on some airlines, and the surcharges are not going away.
Now, a fare is just a downpayment, Boyd told resort industry professionals participating in a Web seminar on Year 2008 Airline Industry: Revolutionary Change, presented by the Mountain Travel Symposium.
With surcharges becoming the norm, winter resort destinations might need to take a look at creative ways for their customers to bring their gear, such as suggestions to ship skis on Fed Ex or DHL, he said.
The surcharges are just one way the airline industry is looking for additional per-seat revenues, as it reels from the cost of oil.
No airline flying today was structured to fly at $50 a barrel, much less $100 a barrel, Boyd said.
The result is a shrinking industry in revenue, passengers, markets and planes in all areas but the cost of fares. Boyd predicts that the industrys 6,300 jets will decrease to 6,000 or less by the end of 2009. Also, as smaller regional jets are retired, markets such as Salem, Ore., to Salt Lake City will be gone, he said.
Dont expect any real service to South Lake Tahoe. Those days are gone, Boyd said.
The comprehensive network carriers, such as United or American, are trimming routes; for example, seven flights from Chicago to Denver instead of eight flights per day.
However, not all the airline industry changes will hurt mountain ski resorts, and mountain destinations could fare better than places such as Las Vegas or Florida.
The airlines arent interested in more passengers, just more money per passenger, Boyd said.
That affects markets such as Orlando, Fla., or Las Vegas because the passengers those destinations attract are much more price sensitive than are visitors to mountain ski resorts.
Deer Valley, Aspen, Vail ... this is not Vegas and the clientele that go there are not Vegas, Boyd said.
Boyd explained that the through yield (revenue per passenger mile) from New York to Aspen could be 15 cents to 18 cents, while that revenue is 9 cents to Florida and 5 cents to 6 cents to Hawaii.
If the airlines make more money flying to Aspen, that market will be continued for the airline, he said.
In fact, travel to Aspen by airline is up 2 percent to 2.5 percent over the same time last year, but it is a different mix of passengers since now there is no service from Phoenix, but there is service from Atlanta, he said.
The amount of time it takes to fly to a destination will also be a factor for various mountain resorts (less is better), as well as if they are serviced by the declining number of regional jets or by one of comprehensive network carriers or low cost carriers such as Southwest and Frontier.
As the airline industry changes, destinations might have to consider minimum revenue guarantees for airline service as a cost of doing business, just like advertising costs.
If Im an airline and youre going to pay me, Ill stay, Boyd said.
Will anybody be able to afford it with all the fees tacked on? mused Mike Boyd, co-founder of The Boyd Group, an Evergreen, Colo.-based company that focuses on consulting, research and analysis of aviation trends. If I buy a ticket, I should have the reasonable expectation of being able to bring my underwear.
Yet, window seats are selling for $10, a cup of water goes for $2 on some airlines, and the surcharges are not going away.
Now, a fare is just a downpayment, Boyd told resort industry professionals participating in a Web seminar on Year 2008 Airline Industry: Revolutionary Change, presented by the Mountain Travel Symposium.
With surcharges becoming the norm, winter resort destinations might need to take a look at creative ways for their customers to bring their gear, such as suggestions to ship skis on Fed Ex or DHL, he said.
The surcharges are just one way the airline industry is looking for additional per-seat revenues, as it reels from the cost of oil.
No airline flying today was structured to fly at $50 a barrel, much less $100 a barrel, Boyd said.
The result is a shrinking industry in revenue, passengers, markets and planes in all areas but the cost of fares. Boyd predicts that the industrys 6,300 jets will decrease to 6,000 or less by the end of 2009. Also, as smaller regional jets are retired, markets such as Salem, Ore., to Salt Lake City will be gone, he said.
Dont expect any real service to South Lake Tahoe. Those days are gone, Boyd said.
The comprehensive network carriers, such as United or American, are trimming routes; for example, seven flights from Chicago to Denver instead of eight flights per day.
However, not all the airline industry changes will hurt mountain ski resorts, and mountain destinations could fare better than places such as Las Vegas or Florida.
The airlines arent interested in more passengers, just more money per passenger, Boyd said.
That affects markets such as Orlando, Fla., or Las Vegas because the passengers those destinations attract are much more price sensitive than are visitors to mountain ski resorts.
Deer Valley, Aspen, Vail ... this is not Vegas and the clientele that go there are not Vegas, Boyd said.
Boyd explained that the through yield (revenue per passenger mile) from New York to Aspen could be 15 cents to 18 cents, while that revenue is 9 cents to Florida and 5 cents to 6 cents to Hawaii.
If the airlines make more money flying to Aspen, that market will be continued for the airline, he said.
In fact, travel to Aspen by airline is up 2 percent to 2.5 percent over the same time last year, but it is a different mix of passengers since now there is no service from Phoenix, but there is service from Atlanta, he said.
The amount of time it takes to fly to a destination will also be a factor for various mountain resorts (less is better), as well as if they are serviced by the declining number of regional jets or by one of comprehensive network carriers or low cost carriers such as Southwest and Frontier.
As the airline industry changes, destinations might have to consider minimum revenue guarantees for airline service as a cost of doing business, just like advertising costs.
If Im an airline and youre going to pay me, Ill stay, Boyd said.
This article is a feature of Inside Business, published Tuesdays in The Aspen Times.


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