Laughlin seeks scheduled air service

Monday, May 18, 1998 | 10:10 a.m.

A Denver-based airline executive is evaluating a proposal from a company to form a joint venture to start an airline that would fly twin-engine jets to Laughlin from several western cities.

Joe Lorenzo, the founder of Reno Air, is considering whether he wants to start Laughlin Jet Express with a partner or whether it would be more lucrative to develop it with financing he has been putting in place for several months.

Lorenzo, who is unrelated to Frank Lorenzo, the head of Continental Airlines, said he has reached a verbal agreement with the undisclosed partner, but isn't ready to make a formal announcement.

"We've made a lot of progress and I have someone who wants to do a deal," Lorenzo said. "But the deal isn't done just yet. When it is, we'll be calling the media."

News of the airline's startup comes on the heels of a lackluster visitor volume and occupancy report issued recently by the Las Vegas Convention and Visitors Authority, which tracks Laughlin's tourism statistics.

Every category in Laughlin's visitor report was down in the first quarter of 1998, the LVCVA report said. For the three months, visitor volume was down 7.8 percent to 1.1 million, hotel occupancy was down 6 percent to 86.1 percent and gross gaming revenue was down 1.5 percent to $134.1 million.

But the glaring deficiency is in air traffic.

The number of passengers flying into Laughlin-Bullhead International Airport in Bullhead City, Ariz., was down 61.7 percent to 21,722 passengers. The average daily traffic on State Highway 163, the main route into Laughlin, was down 5.2 percent to 5,097.

In all categories, March statistics represented a rebound of sorts -- while visitation, occupancy rates and gross gaming revenue were all down from 1997 levels, the decrease wasn't as severe as it was the first two months of the year.

Terry Jicinsky of the LVCVA's marketing department, said Laughlin's airport statistics are greatly influenced by whether scheduled air service is available.

Most of the approximately 7,000 monthly passengers today arrive at the airport in charters or in private planes.

Jicinsky said a handful of carriers have tried and failed to consistently serve the Laughlin market.

Two carriers that tried were Morris Air and United Airlines. Morris, a Salt Lake City-based operation that discontinued daily flights in 1994 when it was acquired by Southwest Airlines, flew Boeing 737s to Laughlin from Salt Lake City.

United, through an arrangement with Mesa Air, operated United Express between Los Angeles and Laughlin until early 1997.

"You can't imagine how many people call me from Southern California wanting to fly here directly and I have to turn them away," said Bonnie Luttrell, airport accountant for the Mohave County Airport Authority, which operates the Laughlin-Bullhead airport.

Luttrell said she used to commute regularly on United's service to Los Angeles International Airport. Now, the only way to fly from Los Angeles, she said, is to hook up with a charter or to fly to Las Vegas and take a ground shuttle to Laughlin which, she said, "takes about as long as driving from L.A."

Regardless of whether Laughlin Jet Express is operated by Lorenzo or by a partnership, the resorts of the Colorado River resort community have agreed to subsidize the carrier with $15 million to get the airline off the ground.

Tom Jenkin, general manager of Harrah's Laughlin and former president of the commission that sets policy for the airport, said the new airline could begin flying by July or August.

Jenkin said when his commission presidency ended, he was asked to continue to negotiate airline deals for the community, working through his property and the other nine resorts. That's how he came into contact with Lorenzo.

"The way I understand it, he's (Lorenzo) working through the details to see what would be the best way for them to go," Jenkin said.

Jenkin said the airline would grow to 18 flights a day within the first year. Although based in Denver, the center of the company's hub-and-spoke system would be Laughlin. The airline, he said, would have daily flights between Laughlin and Los Angeles: San Diego; Phoenix; Denver; Salt Lake City; Dallas; Colorado Springs, Colo.; and Ontario and Burbank, Calif.

Jenkin said fares would be about $60 round trip from California and Arizona and $120 round trip from Colorado.

Lorenzo hopes to have three planes in his fleet and is looking into flying Boeing 737s, MD-80s or Airbus 320s -- all twin-engine jets with seating capacities of about 140 passengers.

Mike Boyd, an airline analyst with The Boyd Group, Evergreen, Colo., said the concept of developing a hub-and-spoke system from a small gaming resort town was proven to be a viable proposition by Casino Express when it flew charter flights in and out of Elko.

"If Casino Express could do it out of Elko, I think Lorenzo can make it successful in Laughlin, especially if the resorts are behind him," Boyd said. "They would have to keep fares low because Laughlin is kind of a pickup truck-type of resort, no offense to the people of Laughlin."

Nolan Wiley, director of quality control for Casino Express, said his company is now looking into more lucrative flights for the company and will soon pull out of Elko. Casino Express, he said, is not the unnamed airline company with which Lorenzo is negotiating.