National acquiring more 757s to expand in Vegas

David Strow

Monday, June 26, 2000 | 11:17 a.m.

Las Vegas-based National Airlines today announced a substantial expansion of its fleet -- an order of up to eight new Boeing 757 aircraft by June 2002.

The order will expand National's fleet to at least 23 aircraft by 2002. National also has options to acquire an additional 12 aircraft from Boeing.

"In all likelihood, we will have more aircraft than that (by June 2002)," said Dik Shimizu, spokesman for National. "It doesn't mean we'll stop looking for more aircraft. It gives us a very strong foundation for us to move forward."

As it's done with its entire fleet to date, the first four 757s will be leased, though Shimizu didn't rule out a purchase of future aircraft. The 757s cost $55 million apiece; the company didn't say how much it will pay per year to lease the aircraft.

Since launching service in May 1999 with two aircraft, National has expanded to offer 27 flights daily to and from McCarran International Airport. It currently serves seven cities -- Chicago-Midway, Dallas-Fort Worth, Los Angeles, Miami, New York-JFK, Philadelphia and San Francisco -- and plans to initiate two daily flights to Newark, N.J., on July 13.

The aircraft in today's order will allow National to expand service to those cities, but it will also allow new cities to be added to National's roster in the coming years, Shimizu said. Currently, National's priority cities for expansion include Washington National, Seattle, Houston, Orlando and Atlanta, he said.

But that probably won't come at the expense of other airlines, said Mike Boyd, aviation analyst with the Boyd Group of Evergreen, Colo.

"The unique thing about National, unique among any new airline, is that they're going after traffic the other airlines don't want," Boyd said. "They're not trying to steal it ... other carriers don't want to mess with it. That's why National Airlines will be a long-term success."

Though growing, National has yet to crack the Top 5 at McCarran. It enplaned and deplaned 682,000 passengers over the first five months of 2000, less than 5 percent of McCarran's total during that period.

But Dave Ehlers, chairman of Las Vegas Investment Advisors, believes the airline's impact on Las Vegas goes beyond what those numbers might suggest. In May 2000, Ehlers pointed out, 66,000 airline seats flew daily into Las Vegas, up from 56,000 in mid-1999. Ehlers attributes one-half of that gain to National.

That gain in airline seats, Ehlers said, is a big reason Las Vegas casinos have been performing so well so far this year.

"We've been saying that a lack of air service was responsible for adverse visitor trends in 1997 and 1998," Ehlers said.