Gondola Volte-Face Not A Slippery Slope

Global warming and its threat to the ski industry are forcing leading makers of ski cable transporters to look to urban mass transit projects for new revenue.
Leitner gondolas zooming over Barcelona.

 

In Sterzing, a resort in the province of South Tyrol in northern Italy, everyone is waiting for snow. The ski season is supposed to begin in early December, but there is no guarantee of the white stuff, especially in these days of climate change.

Not exactly good prospects for Sterzing-based Leitner Ropeways, whose products include ski lifts and gondolas. Yet Martin Leitner, the board member in charge of sales, does not complain, he adapts. For the last three years, the company has been manufacturing snowmaking machines.

"This is our youngest brainchild,” said Mr. Leitner.

His great-grandfather founded the company 126 years ago to the south of the Brenner, a mountain pass through the Alps between Italy and Austria.

In 1908, he helped install the first European passenger ropeway in Bozen, Italy, the capital of South Tyrol. Since then, the Leitner family has been upwardly mobile, Alpine-style, making T-bar lifts, chairlifts and cable cars. In recent years they added snow-groomer tractors and artificial snow to the line-up.

"We want to be a one-stop shop and have everything people need," Mr. Leitner said.

Nowadays, in chic Alpine resorts such as Kitzbühel in Austria and Garmisch in Germany, guests travel up the slopes in enclosed cable cars with heated seats. But since this wave of modernization, the ski market has been stagnating. New ski destinations in Russia, Kazakhstan, Azerbaijan and China have not helped that situation.

Leitner is adapting again, installing an increasing number of its gondolas and rope tows in cities. Of the €450 million in revenue Leitner generates with ropeways, almost a third is no longer connected with skiing.

The company recently opened a ropeway in the Turkish capital, Ankara, and people travel overhead in the family company’s metal enclosures in New York and Mexico City too.

They are flexible for routing purposes, the costs are reasonable, and ropeway projects can be implemented quickly. Martin Leitner, Board Member of Leitner Ropeways

Mr. Leitner sees his cable cars as a favorable alternative to trams and underground trains. "They are flexible for routing purposes, the costs are reasonable, and ropeway projects can be implemented quickly," he said.

The business of providing solutions for urban and tourist areas has meant double- digit growth for the company, with its share of overall ropeway revenues set to grow from 17 to 30 percent.

The company's biggest rival is Austrian firm Doppelmayr, which bills itself as a global market leader and also targets the growing urban market.

Leitner recently generated annual sales of €750 million ($931.8 million), of which €450 million was with ropeways. Doppelmayr concentrates completely on lifts and ropeways and had revenues of €795 million in the last business year.

Leitner was struggling along with about €25 million in revenues 25 years ago. Two of three brothers in the family wanted to unload their shares. Then along came a buyer, who turned out to be a real savior.

Michael Seeber, a 66-year-old construction entrepreneur, led the company to new heights, and owns two-thirds of the company today.

Michael Leitner, the third brother, owns the rest.

Mr. Seeber is an old-school entrepreneur, a proud down-to-earth local man, who was willing to take risks. In 1999, he took over the snow-grooming company Pieroth and, a year later, the much bigger French ski lift rival Poma.

Now Leitner is represented in 90 locations worldwide, and offers 90 different types of chairlifts alone.

 

Axel Höpner heads the Handelsblatt bureau in Munich, and Joachim Hofer is the Munich correspondent. To contact the authors: [email protected], [email protected].