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National averaged 36 flights per day some 8% of McCarran
International’s daily departures. Its fleet of 18 Boeing 757s flew
approximately 200,000 people per month to Las Vegas, most of them
leisure travelers, making it the city’s fourth largest carrier in
terms of passengers.
But Hilarie Grey, public affairs manager for the Clark County
Department of Aviation, contends that National’s demise Nov. 6
won’t cripple the city’s ability to fill hotel rooms.
“We really think that the only markets where we’re lacking seats
that are highly in demand are Philadelphia, Miami and New York
JFK,” she said.
To fill the sudden void, JetBlue moved up the launch of its
JFK-LAS service from January to Nov. 15. By March, the low-fare
carrier plans to field four A320s per day on the route. Also,
American intends to begin nonstop MIA-LAS service in February and
low-fare Spirit Airlines said it will begin nonstop Chicago-Las
Vegas flights in December.
From the airport’s perspective, National’s shutdown hurts. But
officials say they expect the healing process to be rapid.
“Over time, we think that other carriers will pick up the
demand,” Grey said.
Virtually all observers were surprised that National tanked so
“I was sort of hoping they would find a way to stay in
business,” said Darryl Jenkins, director of the Aviation Institute
at George Washington University. “I will miss having them
Conventional wisdom has it that airlines can’t make money flying
to Las Vegas. Because the city is largely a leisure destination,
fares are low so seats yield less than they would on routes flown
by significant numbers of business passengers.
But Jenkins disputes the notion that LAS is commercial
aviation’s equivalent of a black hole. He said Las Vegas is
Southwest Airlines’ largest origin and destination market. Not only
does Southwest operate a virtual airbridge from major West Coast
cities to LAS, it also offers nonstop service from smaller cities
such as Texas’ Amarillo and Lubbock and even Albany, N.Y.
Mike Boyd, president of the Boyd Group, an aviation consulting
group based in Colorado, said that National’s business plan made
sense: frequent, low-cost, dual-class service from major population
centers to the entertainment capital of the United States.
It would fill the void created by the traditional contempt that
big airlines have for the place.
“The major airlines don’t give a rip about Vegas,” Boyd
Headed by a creative, admired chief executive Michael Conway
National attracted a legion of true believers, including Harrah’s
Harrah’s held a significant equity stake in National. The notion
behind that stake went beyond reaping straight return on
investment. Harrah’s wanted to fill its casinos, said a Harrah’s
spokesman, David Strow.
“By helping a carrier based in Las Vegas, we could encourage
travel to the city,” Strow said. “Air travel is absolutely crucial
in getting visitors.” National may have brought more visitors to
Vegas, but they didn’t necessarily spend their money at
“Approximately 10% of the passengers flying on National Airlines
actually stayed at Harrah’s properties in Las Vegas,” Strow said.
“The remaining 90% stayed with our competitors.”
The upshot: Harrah’s believes that because other casinos
benefited directly from the airline, they should have contributed
to its bailout.
“Other people, if they had wanted this airline to stay, could
have stepped up to the plate,” Strow said.
Harrah’s issued a letter of credit to National to help it fly
through bankruptcy, which the carrier entered in December 2000.
That helped, but Conway’s crew needed more. National applied for a
federal loan guarantee from the Air Transportation Stabilization
Board in February. On Aug. 14, the ATSB rejected the bid.
The government’s rationale? The ATSB didn’t agree that the
guarantee was a necessary part of maintaining a safe, efficient and
viable commercial aviation system in the United States.
Conway, appalled by the decision, called it “inconsistent” and
He was joined by U.S. Rep. Shelly Berkley, D-Nev., who said,
“The large carriers are being treated as if they are too big to
fail, and smaller, more efficient carriers are being hung out to
Despite the rejection, National attempted to put together a $112
million reorganization package and was expected to emerge from
Chapter 11 in October. Conway said, “We were very close to
completing a successful reorganization on a few different
occasions, only to have obstacles confront us at the last
One obstacle proved insurmountable.
“Supposedly, everything was moving forward in a very positive
vein,” said Bill Mahaffey, manager of transportation for the Las
Vegas Convention and Visitors Authority. “But at the final hour, $2
million disappeared from the table.’’