No airline subsidies to come to LV

Monday, Nov. 17, 1997 | 12:47 p.m.

When resort operators in Biloxi, Miss., wanted to lure tourists to their new casino properties, they found a willing business partner in Reno Air.

Based in Nevada with routes that extend as far east as Chicago, Reno Air's primary focal points have been in Reno, Las Vegas and the West Coast. Why would Reno Air break off its hub-and-spoke route system to serve Biloxi from Tampa and Atlanta? The answer is subsidies.

Biloxi's resort community chipped in to guarantee Reno Air a profitable venture.

So why don't the Las Vegas Parties, a partnership of executives from the Las Vegas Convention and Visitors Authority, McCarran International Airport, the Las Vegas Chamber of Commerce and the Nevada Development Authority, find funds to subsidize airlines to Las Vegas to bolster the resort industry?

They can't and they won't.

"We don't want to get into the subsidy game because it would jeopardize federal funding for our airport projects," said Harry Kassap, manager of air service development at McCarran. "Subsidies would be in violation of federal grant assurances."

Kassap explained that resort associations or business groups can and occasionally do offer subsidies, generally in the form of prepurchased seats.

"If you do it for one (airline), the rest are going to scream, so you have to do it for them all," added Kassap's counterpart at the LVCVA, William Mahaffey, manager of transportation.

"Subsidies are not the norm and it's not even prudent for us to bring up," said Mahaffey.

While government-funded agencies like McCarran and the LVCVA can't offer subsidies, private businesses can, which is what some observers think happened when British Airways began international service between London and Phoenix.

Phoenix is home to Motorola, a player in the British electronics industry.

With an air route slot between London and the United States set to be awarded by Britain's Civil Aviation Authority next month, some concern has been raised about British Airways' bid to serve Denver International Airport, which has some of the highest landing fees in the nation.

Denver also is home to a number of business interests capable of offering subsidies that could lessen the load on the airline.

British Airways is competing with Virgin Atlantic, which wants to offer Las Vegas-to-London flights.