By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
Continental divide: There was good news--and bad--coming from the Yellowstone Regional Airport outside Cody, Wyoming, last week. In order to ensure that Continental Airlines continued to provide daily jet service to the area, the airport had agreed to provide a "revenue guarantee" for the airline. Last year that guarantee amounted to over $100,000.
This year, though, thanks to increased passenger usage, the airport will pay Continental less than half that, manager Laurie Suttmeier revealed. "We have done very well this year," she told county commissioners.
But they could have done even better. According to Suttmeier, this year Continental reduced the amount it credited the airport from $68 to $58 per passenger. The reason Continental provided for its parsimony? Higher costs associated with the new Denver airport.
Not, of course, that Denver International Airport is anywhere close to opening. And not, of course, that Continental will be doing much flying out of DIA when it does. In fact, Continental will quit offering service to Yellowstone next month. GP Express and United Express will take up the slack, says one airport spokeswoman: "We've traded one giant airline for two little ones."
Continental isn't the only airline specializing in creative financial deals. You may have read earlier this month that the Webb administration and United Airlines "bagged a deal" to pay for an altered automated baggage system for Denver International Airport's Concourse B. But read the fine print in the official statement for the city's recent $257 million bond offering and you'll see that the airline and the city won't exactly be "splitting the cost" of the changes. Both sides will indeed put up $11 million in front money to fund a cannibalized baggage system for United. But the city will reimburse United as soon as DIA opens. And if costs exceed $22 million, the city will fork over up to $8 million more in cash within six months of the opening. Only if the project's total costs go over $30 million does United have to pay--an unlikely prospect considering that the city has also agreed to let United supervise the monkey-rigging effort. In a not entirely successful attempt to clear the air, a recent update from the mayor's DIA Communications Task Force claims that United will actually wind up paying all the costs through its "rates and charges over time."
Take the money and ski: As Denver debates how to keep its cash flow from the Winter Park ski area safe from Amendment 1--the latest idea is an "enterprise" fund that would theoretically bypass spending limits--an avalanche of dough continues to roll in at the city-owned mountain resort.
According to the Winter Park Recreational Association's latest balance sheets, the ski area turned a profit of $3.89 million on total revenues of just over $35 million in the year ending April 30, 1994. And that was after taking a $212,758 writeoff to help cover the costs of a bond refinancing. The financial report also notes that the WPRA now has a whopping $36.7 million in the bank. In the original deal proposed by Mayor Wellington Webb--and ultimately shouted down by critics--the WPRA had an option to buy the resort outright from the city for just $24.5 million. The city's latest deal gives Denver $1 million per year plus 3 percent of the ski area's total annual revenues. However, the far-from-ironclad agreement also allows the resort to skip a payment once every five years without penalty.
It could all be downhill from here.