Leitner-Poma buys SkyTrac

Peter

Back to two lift manufacturers!

obienick

How is this not in violation of anti-trust laws?  Doppelmayr did the same $4!7 a few years ago with Partek.

There are now 2 competitors.  The cost of lifts - fixed or detachable - have far surpassed inflation rates since the elimination of competitors.  Hall, Von Roll, CTEC, and Garaventa all fell under control of Doppelmayr between 1984 and 2002.  Borvig and Yan went belly up. Riblet couldn’t keep with the mergers flying solo and closed shop in 2003.  Partek sprung up and was quickly bought out by Doppelmayr.  Leitner was entering the US market - initially in conjunction with Borvig, and then solo - and merged with Poma.  And now this.

It’s at the point that a new lift is simply unaffordable for a good number of ski areas.

$3M for the last 2 3800 ft. fixed-grip lifts.

$800k for a terminal alone.

How can a small area like Bradford, Nashoba, McIntire afford a new replacement? That alone would be about $2M for them.  (3,000,000 - 800,000)/3800 * 1500 = $1.97M

“Well, they can install a used lift”

Not really much of an option these days.  Lifts are not being replaced at the rate they were installed at.  Lifts are aging quickly.

Heck, what about Magic?  A 5300 ft. new FG lift would be on the order of $3.9M.  But Black when installed in 1962 cost just $300k, or less than $2.4M today.

And with Magic’s situation, there’s not many long lifts available to poach.  Most were replaced 15-20 years ago for HSQs.

This is how bad the situation is:  Ascutney installed their HSQ for $2M.  They sold it to Crotched at about the inflated value.  But the lift had over 10 years of service time, and would have depreciated substantially.

American Skiing can’t control 9 New England ski areas, but it’s ok for 2 manufacturers to control 100% of a market while price-matching each other?  Makes total sense! </sarcasm>

NewEnglandSkier13

At least they will still produce their own lifts like Partek currently does. Now we are down to three active lift companies in the US (if you count Partek-Doppelmayr & SkyTrac-Poma each as one).

obienick

Yes, they will still make new lifts, but they aren’t independent whatsoever.  Think about it this way: one company owned two brands, A & B, serving the same market, what incentive is there for the two brands to compete? That’s right, there in no incentive.  If A & B go after the same customer competitively, all it does is hurt the bottom line of their unified owner.

newpylong

This is why you’re seeing surface lifts spring back up again. Not only far less expensive to purchase and install, but much cheaper to operate, maintain and certify yearly. I see the trend continuing. When smaller areas get to the point where their 40-50 year old aerial lift is not affordable to certify any longer they are going to take a hard look at surface lifts.

FSC reportedly started at over $1M with Doppelmeyer on the Mittersell Tbar but ended up signing with LST for $600k because they want to get into North America.

GMVS got their new T bar for 310K though much shorter.

I know of at least 1 other small area pondering a Tbar if and when their chair becomes unaffordable.

obienick

How much of that could be Doppelmayr milking the state for money?  Both Poma’s and their Mittersil Double bids were far higher than normal IIRC.

Peter

I liken it to the Airbus-Boeing duopoly with two strong competitors.  Although Doppelmayr is dominating this year with 15 confirmed lifts vs. 1 each for SkyTrac and L-P in the US/Canada.  The rest of the world is a different story.

nepatsfan1

At first I had to do a double take on the merger… It is kind of sad that the choices are back to basically two… I wonder if Skytrac was running into issues like Partek did with not having a detachable available and was not in the position to have the capital to start development of their own grip and terminal design… We may or may not know the reason behind it… Maybe the offer was just too good to pass up.

newpylong

Poma was sick of Skytrac getting the majority of the fixed grip installs and retrofits, so they wanted a piece of the pie.

DrJeff

Let’s be honest about this.  There’s not a ton of lifts being installed each year, especially in this country.  The technology that the average customer (and I don’t necessarily consider SJ users “average” customers ;) ) has gotten used to and frankly expects doesn’t come cheap to develop.

It’s not very easy for a small company to do all the required safety engineering and R & D work that a modern lift needs to have per regulations to receive certification to operate.

I’m guessing the folks behind Skytrac were more than happy to accept this offer and take some $$ home after their years in the industry and as of late the $$ they spent starting up Skytrac

riverc0il

<blockquote class=“Quote” rel=“obienick”>Heck, what about Magic?  A 5300 ft. new FG lift would be on the order of $3.9M.  But Black when installed in 1962 cost just $300k, or less than $2.4M today.</blockquote>

Are you really trying to equate Magic’s Black Chair with a modern brand new Dopp in terms of dollars spent brand new? How many retrofits has the Black required? It hasn’t run regularly as long as I’ve been skiing Magic because it is so often out of commission. It is a POS frankenlift that had to have major upgrades within the first 40 years of its life. And then it still barely runs and is a massive money suck and maintenance issue. At least with a brand new Dopp, you’ll probably get 60+ years of life easy with only regular maintenance. That has to be worth an extra $1.5M in today’s dollars for a new lift.

I just don’t see this being an issue. There are lots of businesses that only have two major brands that compete against each other. Especially for such a limited and specialized market. New England never sees more lifts installed in one season than can be counted on one hand. Often times the replaced lift can be purchased used by other areas. NBD.

tedede

The cost of lifts - fixed or detachable - have far surpassed inflation rates since the elimination of competitors

</blockquote>You probably need to factor in Liability Insurance.

casual_weekday

Nowadays it just too hard to keep a sustainable business in the ski industry. Look at Reliable Racing, Partek, Riblet, and the mergers of Demac, Lenko, and LP. It was only a matter of time until SkyTrac was swallowed up into a bigger company. 

obienick

Areco was bought out and merged with 2 other other European manufactureres.

LiftGuy

<blockquote class=“Quote” rel=“casual_weekday”>“… It was only a matter of time until SkyTrac was swallowed up into a bigger company.”I see this as a merger, not an acquisition or a hostile take over. This will give Skytrac the opportunity to build it’s client base with backing from LP and give LP access to Skytrac clients that wish to purchase a detachable lift.From the Press Release- "Skytrac will remain in Salt Lake City, keep its brand name and continue to operate independently, using 100 percent made in the USA products."</blockquote>

Peter

Peter from Lift Blog here.  I got to visit Skytrac and get the story of how the purchase went down and what it means for the future.  I’m biased but I think it is worth a read.

https://liftblog.com/2016/05/09/in-his-own-words-carl-skylling-of-skytrac-on-the-leitner-poma-acquisition/

LiftGuy

Nice job on the interview, Peter.