Flights of Fancy

Denver pays a consultant big money to get overseas flights for DIA--and goes nowhere.

However, there were a number of other reasons for Air Canada to start service to Colorado. Airline spokesman Dick Griffith notes that the carrier's decision came eight months after the U.S. and Canadian governments signed an "open skies" agreement allowing airlines free access to each other's markets. Before that, the airline served nine American cities; it now serves twenty-two. The Denver route was also made attractive by the fact that Air Canada recently took delivery on a fleet of new aircraft, allowing it to expand more rapidly, Griffith notes.

City officials did lobby actively to lure the carrier, adds Griffith. But as for SH&E, he says, "I'm totally unfamiliar with their role in this."

Regardless of what promotional efforts are made on behalf of cities, it is the market that ultimately determines where airlines fly. In Denver's case, the city hired SH&E to give it the United Nations; the market gave it United Airlines instead.

The Chicago-based carrier now dominates passenger traffic at DIA, running well over 200 flights per day out of the airport. That monopoly hub has made life difficult for other domestic carriers. And in a scenario never envisioned back in the halcyon days when SH&E made its 1987 forecast, United has also emerged as a barrier to overseas flights. That's because other carriers fear that United, with its dozens of regional feeder flights, has a built-in advantage in the market.

"With most hubs our size, that dominant carrier wants that hub to be an international gateway," says Koller. "To this point, United hasn't made that decision." If it wanted to, United could begin flying tomorrow from DIA to London's Gatwick airport. But because the airline has consolidated its U.K. facilities at Heathrow, it has declined to take over the Gatwick run that Continental abandoned. Instead, United has routed its international passengers via gateways such as Chicago and seems in no hurry to press for a Denver-Heathrow connection.

"Denver's problem doesn't have much to do with SH&E; it's mainly the fact that United doesn't believe there is any advantage in flying to Europe nonstop from Denver," says Doughty. And because of United's death grip on the local market, says Boyd, Denver's costly efforts to lure prestige foreign carriers like British Airways will likely continue to be futile. "I've got no problem with making a projection," he says. "But in Denver, you don't need to hire a consultant to know that unless it's United, your chances of getting scheduled service in here from a major European carrier are extremely low."

Boyd's dour analysis contrasts sharply with the cheery picture painted in the October 1995 presentation SH&E prepared for British Airways. In that document, whose full-color cover features British Airways, DIA and SH&E logos side by side, the consultants portray Denver as an obvious choice for the English carrier. "Denver will be highly profitable for British Airways," promises the report, which goes on to state that even if United were to get into the London market, the local market would be healthy enough to sustain two competitors. The presentation even puts a specific number on the financial bounty that awaits the British company in Colorado: The airline could expect an operating profit of exactly $6,055,757 in 1997.

After touting Denver's recent economic boom, upscale demographics and general acclaim (a 1995 Forbes magazine article is cited for its description of the city's "strong business climate"), the report continues its pitch with a more philosophical argument: "The U.K.'s flagship carrier should serve the U.S.'s flagship airport."

The city spared no expense in making sure the report arrived safely at the subject's door. SH&E's Deborah Meehan flew from Boston to London to make her pitch in person, checking in for two nights at the exclusive Hotel Inter-Continental and billing the city $2,068 for the trip. Koller also flew in to assist in the presentation. The two returned to the U.S. having received a polite reception and no promises.

The transatlantic jaunt by Koller and Meehan was all in a day's work for an airport determined to shed its humble status as the largest passenger market in the U.S. without a nonstop flight to London. And according to Madsen, who herself has made numerous trips to London in an attempt to open up new air routes, SH&E's most recent claims about British Airways are completely reasonable. Perhaps the consultants told the client what it wanted to hear back in 1987, says Madsen, but that's not the case today.

Doughty also defends SH&E's work, pinning most of the blame for Denver's lack of overseas flights on his successors in city government. The city, he says, shouldn't have let the air-service program go dormant after he left in 1992. And the Webb administration's failure to open the airport on time "was also a negative for the marketing effort." Doughty says it makes sense for Denver to gear up the SH&E account again. But, he adds, "it seems to me they're now starting from scratch again."

Madsen and Koller gently suggest that they may take a less starry-eyed approach to marketing than did predecessors such as Doughty, who felt so strongly about international service that he went out and formed his own organization called U.S. Airports for Better International Air Service and then steered thousands of dollars of city money into its efforts to open up new flights. "I can't speak to how it was done back then," says Koller, who came to work for the city in 1994. "If SH&E came to me tomorrow and said, 'You guys should seek nonstop service to Italy,' I'd say no," she adds. "I know in my mind what the viable markets are for this."

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