National chairman tries to rally the airline industry

Kevin Ferguson

Monday, Sept. 24, 2001 | 9:47 a.m.

National Airlines' chairman and chief executive said the Las Vegas airline's deeply discounted airfares for Tuesday flights are proving that for a certain price, Americans will overcome their fear of flying, a fear that was prompted by the Sept. 11 East Coast hijackings.

As a result, National CEO Mike Conway is encouraging his competitors and other tourism agencies to reach deep into their pocketbooks to promote loss-leading fares to get the wary air traveler flying again.

Conway said the company has not had to spend any advertising money on the promotion because "it's been so newsworthy that national news has talked about (the promotion)." He added that Tuesday fares to certain cities have sold out.

Conway is upset that the Las Vegas Convention and Visitors Authority, an agency that is funded by Las Vegas hotel room taxes, is not promoting air fare specials.

"What this is all about is getting America flying again," said Conway, whose company has been operating in Chapter 11 bankruptcy since December. "Once they experience the new security features and see the confident attitudes of the flight crews, the fear of flying will go away."

He said these promotions tie into filling the hotel rooms because about half of Las Vegas tourists arrive by air.

LVCVA spokesman Rob Powers said it's "not appropriate" for the agency to get into the business of subsidizing airlines.

"We appreciate the contribution National has made to the community, but if we start subsidizing one airline then we have to consider subsidizing all of them, and we just don't have the budget for that," Powers said.

Within days of the Sept. 11 hijackings, the airline industry had been pushed to the brink of financial ruin, losing million of dollars when air travel was suspended by a federal order that lasted for three day.

Once flights resumed, many planes were half empty. As a result, most airlines, including National, have slashed their staff by 20 percent.

Conway said his company was on target to get out of bankruptcy restructuring by October before the hijackings, crippling the airline industry. He declined to say how much the company has been set back in its quest to get out of bankruptcy.

Over the weekend, Congress issued a multi-billion tax-funded bail out program for the airline industry, which included $5 billion in cash to reimburse airlines during the three-day flight suspension. The rest is in loan guarantees issued to the struggling industry.

Some critics in Congress have said airlines that were financially troubled before the hijackings should not be entitled to the funds.

Conway said National should be entitled because of the steps it has taken to restructure its finances. He expects National will receive $22.5 million from that $5 billion bail out package.

Last week National Airlines started the "Get America Flying Again" campaign, which includes roundtrip fares to West Coast cities for $25 if the trip originates on a Tuesday. Similar East Coast fares are as low as $75.

Conway said his company has encouraged the Las Vegas hotels to join in the program by offering the first night's stay free for those who show a discounted National Airline boarding pass.

The promotional fares end Oct. 30.

At least 10 hotels have joined the National campaign. They are the Venetian, Stardust, the Rio, Monte Carlo, Las Vegas Hilton, the Flamingo, Harrah's, the Hard Rock, Excalibur, Circus-Circus and the Aladdin.

"We both have commodities tied to time," Conway said. "Once the door to an airline closes and we have empty seats, that revenue opportunity is lost. It's the same for the hotels."

National has reduced its workforce by 20 percent since the hijackings. That included 300 workers, mostly Las Vegas staffers, who either took voluntary leave or were let go.