LV airline reports October losses topping $8.4 million

Wednesday, Jan. 16, 2002 | 11:12 a.m.

National Airlines lost more than $8.4 million in October, the month most U.S. airlines were reeling from the effects of the Sept. 11 terrorist attacks.

Las Vegas-based National, which in October undertook a strategy of offering deeply discounted fares for seats in hopes of filling planes and restoring confidence in the aviation industry, also reported a loss of $576,062 for November.

Since the company filed for Chapter 11 bankruptcy protection in December 2000, the airline has reported $41.3 million in losses, according to National's statement of operations filed last month in U.S. Bankruptcy Court.

National had forecast $30.2 million in operating revenues in October, usually a strong convention month in Las Vegas. But following the terrorist attacks and the postponement of more than 250 conventions, meetings and shows, the airline posted operating revenues of just $17.4 million.

While revenues were off for the month, expenses also were reduced significantly by the fewer operations. Operating expenses were $25.2 million, compared with forecast expenses of $28.8 million for the month, with lower costs for landing fees, fuel, aircraft maintenance and repairs and travel agency commissions.

In addition to expenses outstripping revenues, National also paid more than $375,000 in reorganization fees for the month.

In November, National reported operating revenues of $17.3 million and operating expenses of $24.4 million, for an operating loss of about $7.1 million. But the airline received $6.7 million that month, part of the $17.9 million grant National was promised by the federal government as compensation for airport closures that grounded the nation's airlines after the terrorist attacks.

That resulted in a net loss of $576,062 for the month.

But National also noted in its filing that its figures are based on the original contract rate the company has had for its aircraft rentals with eight lessors. Shortly after filing for bankruptcy protection, National renegotiated several leases and won concessions on its contracts.

Adjusting the leases to the lower level, National said it actually posted a net income of $1.4 million for November and a loss of only $6.5 million in October.