A losing proposition | SteamboatToday.com

A losing proposition

Executive says flights to ski resorts prove costly for airlines

— Mathew Friebe is a personable guy, but he doesn’t pull many punches.

Friebe is director of North American planning for Northwest Airlines. His job is to allocate Northwest’s resources aircraft to the routes that will yield the most revenues. Millions of dollars can swing on those judgments.

Friebe calls Steamboat Springs a marginal route for his airline.

Friebe was in Steamboat last week to attend the annual “Airline Partners Summit” hosted by the Steamboat Ski and Resort Corp. He takes part in the contract negotiations with Ski Corp. Vice President of Marketing Andy Wirth that result in the daily round-trip service Northwest provides between Minneapolis and Yampa Valley Regional Airport near Hayden during ski season.

Friebe said that a year ago his bosses were telling him not to bother renegotiating the contracts for Northwest’s ski season flight to Steamboat essentially, his bosses were telling him that the contract negotiations and necessary add-on marketing were more trouble than the route was worth to them.

“They were telling me, ‘don’t spend all this time on ski resorts,'” Friebe said. “Ski resorts aren’t that good for us. It’s a marginal use of airplanes. It’s not that profitable for us even with (revenue guarantees put up by the Ski Corp. and the community).”

Friebe said had Wirth not come to him last year with revised numbers that worked for his airline, he could have and would have walked away from the Steamboat route and put on a fourth daily trip to Tampa or some other sunny destination. That position makes Friebe a tough negotiator.

“The leverage is on my side,” Friebe said bluntly.

Friebe acknowledged that since the terrorist attacks of Sept. 11, the commercial airline landscape has been radically altered in a way that affects Steamboat.

In the past, Steamboat had to put up revenue guarantees to offset the “opportunity cost” lost to the airlines by diverting aircraft away from a business route to service YVRA. Business travelers are willing to pay higher fares than are leisure travelers.

Prior to Sept. 11, Friebe said he had to weigh the possibility that adding a third daily round-trip between “Minne” and Dayton, Ohio, might generate more revenue than a daily round-trip to YVRA. If Northwest can capture the right 15 business travelers to Dayton, they can generate more revenue than a planeload of skiers headed for Steamboat.

Companies have pulled back on business travel in the past five months, but that just means Friebe’s options have changed. Steamboat must still compete with other, less complicated leisure destinations on the computer screens of airline schedule planners.

“Las Vegas is really hot right now, Friebe pointed out.

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