Air Organization Hopes to Announce New Low-Cost Carrier Soon
by Kati O'Hare
Sep 13, 2012 | 2016 views | 0 0 comments | 9 9 recommendations | email to a friend | print

MONTROSE – After securing more funding to entice a low-cost carrier to the area, Telluride Montrose Regional Air Organization is one step closer to achieving its goal of sustainability.

TMRAO met with Montrose City Council on Aug. 30, following an Aug. 13 budget meeting with councilors, to discuss the organization's request for more funding from the municipality.

The organization asked councilors to consider doubling last year's contribution – from $135,000 to $270,000 – to help TMRAO secure a contract with a low-cost carrier. 

TMRAO made similar approaches to the towns of Telluride and Mountain Village, and to the Telluride Ski and Golf Co. 

"It looks like all the communities are going to find the money somewhere," TMRAO Director Scott Stewart said, adding that the Montrose councilors "saw the benefit of this unique opportunity. The meeting ended outside executive session, and councilors asked staff to find the extra funds within the budget to help with this effort."

The air organization, which works to guarantee airline services for the region's airports, is in deep discussion with an as-of-yet-unidentified low-cost carrier. Stewart expressed hope last week that a deal could be made in the next two to three weeks.

The carrier, who will be identified only once the deal is final, would help TMRAO meet its long-term goal of securing revenues and increasing services, Stewart said. 

About 15 months ago, TMRAO announced that its payouts to airlines to purchase a minimum number of seats had exceeded its funding, and that the organization would be broke by the end of this year, if something didn’t change. 

The communities of Montrose, Telluride and Mountain Village stepped up with funding to help continue TMRAO's operations, but with the understanding that the organization would work toward achieving sustainability, to lessen the financial burden to the municipalities.

"A lot of our competing communities [that are struggling with air services] have only looked at funding," Stewart said. "We are also looking at the structure of our organization, and are still evaluating that.” For that foresight, he said, “I give our board of directors credit. They are looking at how we can change things to be a more efficient and productive organization."

Securing funding and restructuring are not the only actions the organization is taking. It also is evaluating its strategy, including which carriers it will work to attract, and how to bring them to the bargaining table, Stewart said.

"This low-cost carrier is part of that new strategy adjustment," he said. 

Unlike other carriers TMRAO works with, the potential new carrier doesn't require TMRAO to hold dollars for revenue guarantees. There is some money involved, but the potential contract would allow the organization to put more money into flights, Stewart said. 

The carrier also expects to fill more seats, as it would have more reasonable flight prices for area residents and business travelers, he said. Then, too, if the carrier does really well – and revenues reach a certain level – TMRAO could get some of its money back, as part of the partnership.

As for community funding of TMRAO, Montrose city councilors have asked staff to find a place in the budget for the organization, but that the funding would not be finalized until those budgets have been approved, most likely sometime in late October. 

Montrose County's contribution to the organization is its continued maintenance of Montrose Regional Airport, and possibly, lower airport fees for the potential carrier, Stewart said. 

Meanwhile, the TMRAO quest for funding will continue, because the more money and incentives the organization can bring to the table, the better its chances of a successful deal in the near term, and of a successful program, heading into the future, Stewart said. TMRAO is also working to establish a marketing and promotion plan for the possible new air service provider.

As part of its overall strategy, Stewart said, TMRAO will reach out to the communities that haven't had much involvement, to date, but which, studies show, are benefiting from the air organization's efforts.

"I think with the combined efforts of all three [funding, reorganization and strategy], we will ultimately put the program on firm footing moving forward," he said.

 

Kati O'Hare at kohare@watchnewspapers.com or Tweet @katiohare

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