Disney's Magical Express extended through 2016

[CleveRocks]

HEADLINE:
Walt Disney World, Orlando International Airport strike deal to extend Disney's Magical Express
The agreement will ensure Disney's Magical Express operates until at least the end of 2016

by Jason Garcia | Sentinel Staff Writer
March 18, 2009

Walt Disney World and Orlando International Airport completed a deal Wednesday to continue the resort's free passenger-and-luggage shuttle until at least the end of 2016.

Under the terms of the deal, the airport agreed not to raise the 75-cent-a-passenger fee it charges the resort for Disney's Magical Express. The previous contract would have allowed the airport to raise the fee to as much as $1.50 a passenger under certain circumstances.

Disney buses ferried just under 2.2 million travelers from OIA to either its resort hotels or cruise ships in 2008, according to airport figures. That works out to about $1.6 million a year in payments to the airport -- compared with about $3.2 million were the per-passenger fee doubled.

The previous agreement had been set to expire at the end of 2011. The new pact also gives Disney the option to extend the agreement by another five years, until 2021.
Airport leaders have been working to cut costs and raise money -- including plans to cut an undisclosed number of jobs -- as passenger traffic and revenue tumble amid the global recession. But Jeff Fuqua, chairman of the Greater Orlando Aviation Authority, said the agency decided it was better served by not raising Disney's fee, in return for securing a longer commitment from the company to operate Magical Express.

Because Disney's Magical Express luggage is processed in a remote hangar at the airport, the service diverts thousands of bags every day away from OIA's main luggage-sorting systems and claim areas. That eases pressure on the airport to spend money expanding its baggage facilities, Fuqua said.

"What they were looking for was control on costs. What we were looking for was to relieve ourselves of capital costs -- big costs," Fuqua said.

The airport also agreed to raise the threshold under which it could have forced Disney to open a second customer check-in location in the airport's main terminal. Under the previous deal, OIA could have required Disney to rent more counter space once Magical Express reached 2.2 million arriving travelers in any 12-month period; now, it can do so only once the shuttle service reaches 2.5 million arriving passengers

The new agreement continues a provision preventing Disney from establishing another Magical Express at any airport within a 100 mile radius of OIA -- ensuring Disney can't bring the service to Orlando Sanford International Airport.

"We're pleased the contract extension will enable us to continue to operate Disney's Magical Express for many years to come," Disney spokeswoman Kim Prunty said. "We think Disney's Magical Express has proven to be incredibly successful – it has benefited the airport and the Central Florida community, as well as Walt Disney World and millions of visitors to our region."

[T-Belle]

I'm so glad Magical Express will continue as I believe this is one of the best perks Disney has to offer. I had to take a cab once and the fare was just under $100.00 plus tip!

[c&d]

Glad it's being continued.

[lockedoutlogic]

....was there ever any doubt?

especially with both Sea World and Universal making addtions and Disney....well....doing absolutely nothing currently...

Don't get me wrong....those places only really have the potential of pulling someone off WDW property for a day or two......but Disney loves the concept of eliminating the rental cars and locking you behind a purple sign somewhere....

A useful service....nonetheless

[DisneyFanaticDargon]

I love this service going TO WDW, but I hate it leaving. So depressing when you head back to the airport?

[Nascfan]

Sounds like they both got some things they wanted.

[lockedoutlogic]

Sounds like they both got some things they wanted.

Really?

'cause it looks like the airport got nothing....in fact lost revenue....and Disney whittled their costs down....

Which is standard operating proceedure out of the "how to be firm with disney playbook"

[goofyskier]

Last time we went we used Magical Express to get from the airport to WL then, for our three day jaunt over to Universal we just booked a Mears Shuttle for our transfer from Disney to Universal and then Universal to the Airport. Considering this was something I used to pay for all the time prior to Magical Express; the 75 bucks is not a big deal.

[DawsonAR]

That it wonderful!

[Nascfan]

Really?

'cause it looks like the airport got nothing....in fact lost revenue....and Disney whittled their costs down....

Which is standard operating proceedure out of the "how to be firm with disney playbook"

Yeah, really. Fuqua said above that they don't have to spend money on expanding its baggage facilities now, 4th and 5th paragraphs from the bottom. And Disney is locked into MCO because of the radius stipulations. Sanford has a LOT cheaper fares, at least from this area. So they're actually protecting $1.65 million dollars in revenue (based on 2.2 mil visitors) vs possibly losing who knows how much. Sure, they may have been able to raise it, but at what cost if Disney would have went to Sanford?
Sorry lockedout, but your "all things Disney bad" is wrong on this one. Give and take going on with this deal.

[lockedoutlogic]

Yeah, really. Fuqua said above that they don't have to spend money on expanding its baggage facilities now, 4th and 5th paragraphs from the bottom. And Disney is locked into MCO because of the radius stipulations. Sanford has a LOT cheaper fares, at least from this area. So they're actually protecting $1.65 million dollars in revenue (based on 2.2 mil visitors) vs possibly losing who knows how much. Sure, they may have been able to raise it, but at what cost if Disney would have went to Sanford?
Sorry lockedout, but your "all things Disney bad" is wrong on this one. Give and take going on with this deal.

Ok...since you made it interesting...

First off...we both know where Sanford is (I assume...because you made it seem like it is just as convenient to WDW as OIA....which of course is not true at all)....and the concept that it will pull Disney travelers on a significant scale away from OIA is kinda silly....come on now....let's just accept it. It's about a fifth of the size....and it's 25-40 miles FARTHER away (depending on greenway or no) on the otherside of a large american city with questionable traffic patterns. These are the facts

Second....it looks to me as though OIA had the right to raise the rates for service AND insist that Disney rent more counter space based on volume....they yielded those rights
...which to me....seems like they actually are giving up revenue.

The deal they're getting is the same....they are leaving potential money on the table here....

Perhaps you're using new math or something?

What did they get? A longer deal at locked rates that don't escalate with depreciation and potential rising costs?

Yes they did...so from a strict standpoint they "guaranteed funds" so they won't have to upgrade services....

but a little brainpower says that the "threat" of Disney pulling out for another airport is about the funniest joke this side of a Mel Brooks movie.....they arent' going anywhere....it doesn't matter if sanford gives away free flights.....OIA is the only airport they can effectively use....come on now....

OIA gets to keep a deal on the books....that isn't terrible for them.....but Disney gave nothing....we know this....they are going to pay the same for transport services (barring more than cost of living Mears increases) while raising their own prices on everything once the customer gets inside the gate on Osceola Parkway....

This isn't "everything disney does is bad..." This is pure facts and common sense...

I know i'm negative....but I also know I don't go to bed blitzed on the koolaid....

there is no argument or angle here

[Nascfan]

Ok...since you made it interesting...

First off...we both know where Sanford is (I assume...because you made it seem like it is just as convenient to WDW as OIA....which of course is not true at all)....and the concept that it will pull Disney travelers on a significant scale away from OIA is kinda silly....come on now....let's just accept it. It's about a fifth of the size....and it's 25-40 miles FARTHER away (depending on greenway or no) on the otherside of a large american city with questionable traffic patterns. These are the facts

Second....it looks to me as though OIA had the right to raise the rates for service AND insist that Disney rent more counter space based on volume....they yielded those rights
...which to me....seems like they actually are giving up revenue.

The deal they're getting is the same....they are leaving potential money on the table here....

Perhaps you're using new math or something?

What did they get? A longer deal at locked rates that don't escalate with depreciation and potential rising costs?

Yes they did...so from a strict standpoint they "guaranteed funds" so they won't have to upgrade services....

but a little brainpower says that the "threat" of Disney pulling out for another airport is about the funniest joke this side of a Mel Brooks movie.....they arent' going anywhere....it doesn't matter if sanford gives away free flights.....OIA is the only airport they can effectively use....come on now....

OIA gets to keep a deal on the books....that isn't terrible for them.....but Disney gave nothing....we know this....they are going to pay the same for transport services (barring more than cost of living Mears increases) while raising their own prices on everything once the customer gets inside the gate on Osceola Parkway....

This isn't "everything disney does is bad..." This is pure facts and common sense...

I know i'm negative....but I also know I don't go to bed blitzed on the koolaid....

there is no argument or angle here

Ok, I can fly to Sanford from our local airport nonstop for about $200 less than what I pay for a flight from further away. I'd spend whatever extra time 40 more miles took me on free transpotation for that kind of money, as I'm sure a lot of people would. Based on non-new math, that's a HUGE savings of $600 for my family. So, yeah, Sanford has the potential to take quite a bit away IF Disney were able to set up another shop there. That is pure facts and common sense.

Maybe MCO would rather have $1.65 mill guaranteed than a possible $1 mill. Who knows what they were thinking. Not you or I. By the way, 2.2 mill at $.75/head is $1.65 mill. Not new math.

Never said they would "pull out", but they could have the potential of adding Sanford if they wanted. They can't under this deal.

Did OIA potentially give away some revenue? Absolutely. But they also kept a large amount of guaranteed.

Lockedout, this is one we're going to have to agreee to disagree on. I'm not changing my mind that they both got something out of the deal, and you're not changing your mind that Disney got everything and OIA got nothing.

And FYI, if you read my posts, you should know I don't drink the Kool-aid either. I see plenty of things Disney does that are bad, just not everything they do is bad just because they are Disney.

[pdrlkr]

[lockedoutlogic]

Ok, I can fly to Sanford from our local airport nonstop for about $200 less than what I pay for a flight from further away. I'd spend whatever extra time 40 more miles took me on free transpotation for that kind of money, as I'm sure a lot of people would. Based on non-new math, that's a HUGE savings of $600 for my family. So, yeah, Sanford has the potential to take quite a bit away IF Disney were able to set up another shop there. That is pure facts and common sense.

Maybe MCO would rather have $1.65 mill guaranteed than a possible $1 mill. Who knows what they were thinking. Not you or I. By the way, 2.2 mill at $.75/head is $1.65 mill. Not new math.

Never said they would "pull out", but they could have the potential of adding Sanford if they wanted. They can't under this deal.

Did OIA potentially give away some revenue? Absolutely. But they also kept a large amount of guaranteed.

Lockedout, this is one we're going to have to agreee to disagree on. I'm not changing my mind that they both got something out of the deal, and you're not changing your mind that Disney got everything and OIA got nothing.

And FYI, if you read my posts, you should know I don't drink the Kool-aid either. I see plenty of things Disney does that are bad, just not everything they do is bad just because they are Disney.

I hear you...we're just not on the same page here...and that's cool

I did however look at Sanford International....and I have to say....concessions by Orlando International make no sense whatsoever.....Sanford offers no airlines of consequence.....and Tampa is too far....

OIA has no legitimate threat...and obviously Disney feels the magical express yields excellent benefits....or they would have let it die by now....

So why do public entities always yield (**cough** OSCEOLA PARKWAY***cough**) when Disney puts the squeeze on them.

The relationship between the public authorities and the Mouse down there are kinda like a good suspense movie.....it's so twisted and convaluted that one side doesn't know exactly which way is up and which way is down.....

And i'm not talking about Anaheim here....

[cgriff]

especially with both Sea World and Universal making addtions and Disney....well....doing absolutely nothing currently...

It's a dangerous economic environment in which to be building right now. Disney might end up looking like geniuses for abandoning Night Kingdom and any other over-the-top expansions and expenditures in Florida at this juncture...

Spending money on preventative maintenance and "spot" upgrades such as what is currently in progress at Space Mountain in the Magic Kingdom make a lot more sense imho. [I thought in another thread here on Intercot you basically agreed with this concept???]

[MOJoe]

Gotta go with Nascfan on this one, but not for main reason you have discussed.
Sanford is not the issue here. Not at all.

The issue is the investments required by both Disney and OIA to handle the passengers and their baggage through the airport, to the resorts.
The real threat to OIA is that Disney will simply stop offering ME as a free service. If that happens, not only would OIA lose the fee it collects, all that baggage that is now sorted and handled in a remote (less costly) area, would be dumped on the main baggage claim area. Huge capital costs would most certainly be required by OIA to processes this onslaught of baggage. This is the real issue. And with all the other Disney cutbacks, threatening to stop ME would be taken as a very serious threat.
As it is, ME is doing OIA a favor by routing Disney customers and their luggage through a unified channel. Disney gets to lock up their customers on site. OIA gets the benefit of the passenger traffic with as little associated cost as possible. So how is this not a win win?
The fee Disney pays OIA remains stable. Good for Disney. Disney ME customers' luggage can be handled in the most efficient way possible. Good for OIA. The only losers here are the limo, taxi and rental car companies.

Disney's position seems strong. ME must be a great benefit, to justifiy spending millions just to attempt to keep guests on site. So if they were really preditory, i would expect them to ask OIA to handle the baggage for free, considering the costs OIA would face otherwise.

[lockedoutlogic]

It's a dangerous economic environment in which to be building right now. Disney might end up looking like geniuses for abandoning Night Kingdom and any other over-the-top expansions and expenditures in Florida at this juncture...

Spending money on preventative maintenance and "spot" upgrades such as what is currently in progress at Space Mountain in the Magic Kingdom make a lot more sense imho. [I thought in another thread here on Intercot you basically agreed with this concept???]

It is a misconception that it's a "dangerous" economic environment for disney....

disney is NOT Citibank or AIG.....they are undoubtedly suffering on the ledger sheet....but they face no long term danger at the current time....

And I'm one of those fools that think that they should POUR in the money into reinvestment in parks right now. Certainly not new gates....but things such as leveling imagination and starting from scratch and completing the development of Animal Kingdom and MGM are exactly what i'm talking about.

The economic climate is favorable for investment....the overhead is lower....the impact is lower...and it can pay off in marketing in a big way on the upswing....

Just as in the stock market: buy low now and then reap the benefits in the longhaul

[JPL]

....was there ever any doubt?

especially with both Sea World and Universal making addtions and Disney....well....doing absolutely nothing currently...

Don't get me wrong....those places only really have the potential of pulling someone off WDW property for a day or two......but Disney loves the concept of eliminating the rental cars and locking you behind a purple sign somewhere....

A useful service....nonetheless

Now this is part of Universal's and Sea World's marketing I never understood. Since they are in realitively close proximity to each other and could team up why they never offered a counter of some type to DME. I mean even a free rental car deal when you pruchase tickets to both parks. It really shows just how much they count on leeching off Disney's business. I mean think of the deals Stay at a Universal resort get front of line Access add a day or 2 at Sea World and get a free rental or shuttle transfer from the airport. They could also arrange for baggage handling.

[lockedoutlogic]

Now this is part of Universal's and Sea World's marketing I never understood. Since they are in realitively close proximity to each other and could team up why they never offered a counter of some type to DME. I mean even a free rental car deal when you pruchase tickets to both parks. It really shows just how much they count on leeching off Disney's business. I mean think of the deals Stay at a Universal resort get front of line Access add a day or 2 at Sea World and get a free rental or shuttle transfer from the airport. They could also arrange for baggage handling.

I think the reality is that universal and seaworld are still...in fact...competitors...

I would think that one day somebody would get serious enough to buy both and then try to blaze a path across I-4 to create the second "megaresort" in orange county....but until that day comes....they are still divided and conquered....

Think of it though....they would have a studio...a thrill park....a zoological park....an intimate high ticket snorkeling, diving, swimming venue....two waterparks.....a shopping area that still hasn't abandoned adult nightlife....

that would be interesting...even without new development

[JPL]

Definately would be interesting and force Disney to step up their game and become more competitive. But still either one could offer a free shuttletransfer or car rental to at least help them compete with DME. Of course working together they would be a much stronger draw and be able to take on the big dog.