Friday, June 28, 2002 | 11:13 a.m.
A new airline entered the Las Vegas market Thursday night, bringing McCarran International Airport one step closer to pre-Sept. 11 capacity levels.
Mirimar, Fla.-based Spirit Airlines began one nonstop flight a day between Las Vegas and Detroit, strengthening the critical domestic long-haul market at the airport.
Although 2002 passenger totals are still running about 7 percent below last year's levels, analysts are enthused that the build-up in capacity signals brighter economic times ahead for Las Vegas.
"Las Vegas continues to show signs of sequential improvement in almost every operating metric as evidenced by June's air seat data and our recent room rate surveys, which we consider two important indicators of forward demand for Las Vegas," said Jason Ader, a gaming analyst with Bear Stearns, in a recent report.
"The recovery from post 9/11 lows continues to track ahead of our expectations and we believe that if the economy continues to show signs of improvement that our current estimates could prove conservative."
Analysts are encouraged that capacity climbed in June, a time when airlines often cut back to Las Vegas as the convention industry hits a summer lull.
McCarran officials reported June capacity to be 1.4 percent below the June 2001 total, with 30 air carriers serving the airport offering 63,136 inbound seats on an average day.
Passenger and capacity statistics are considered leading indicators for the city's gaming industry, since about 46 percent of the city's visitors arrive by plane.
McCarran reported in June that short-haul capacity was down 1.5 percent to 41,504 average daily seats and long-haul capacity was off 0.4 percent to 20,490 daily seats. International capacity was down 14 percent to 1,142 daily seats.
Long-haul markets are considered any domestic destination east of the Mississippi River. McCarran tracks 35 long-haul markets, 43 short-haul markets and 14 internationals. Long-haul and international markets are considered the most lucrative because those visitors have a tendency to stay longer and spend more.
While capacity was still off from a year ago, there were gains in all categories from May to June this year. Short-haul capacity was up 1.6 percent from May, long-haul was up 1.2 percent and international was up 3.1 percent for the month.
On a year-over-year basis, market leader Southwest Airlines added 446 daily seats to the market, a 2 percent increase, and Las Vegas-based National Airlines added 550, a 10 percent increase.
No. 3 National, operating under Chapter 11 bankruptcy protection and awaiting word on a federal government-backed loan guarantee that would trigger activation of a court-approved reorganization plan, added new round-trip service to Seattle and a new round trip to Dallas in May and has plans to serve two Washington D.C. airports and Reno later this year.
The three other top carriers serving McCarran have fewer seats in the market now than they had a year ago. No. 2 America West has 526 fewer seats, down 4.5 percent, No. 4 United has 665 fewer, down 13.7 percent, and No. 5 American, which combined operations with TWA late last year, is down 302 seats, off 7.9 percent compared with last year's total of American and TWA seats.
While American and United -- the nation's two largest airlines -- reduced capacity in Las Vegas from May to June, America West is on an upward trend.
American cut seats to Chicago's O'Hare International Airport, Dallas-Fort Worth, St. Louis, Los Angeles and San Jose, Calif., last month, dropping one of its four Los Angeles round trips and cutting back weekly operations at the other airports. United scaled back capacity to Denver, Los Angeles and San Francisco, adding a sixth daily Chicago-O'Hare flight while trimming frequency at the other cities.
Since February, America West added service between Las Vegas and Raleigh-Durham, N.C.; Colorado Springs, Colo.; Salt Lake City; and Mexico City. It will also begin flights to Fresno and Santa Barbara, Calif., in August.
Other airlines showing capacity shifts from May to June were discounter American Trans Air, which reduced weekly frequency to and from Indianapolis and Midwest Express, which has fewer flights to and from Milwaukee. Continental Airlines added frequency on its Houston and Newark, N.J., operations, while US Airways and Vanguard Airlines added daily round trips to Charlotte, N.C., and Kansas City, Mo., respectively.
Ader said he is enthused about the October debut of JetBlue Airways to McCarran. The New York-based discount flier will offer four daily flights and two that will operate six days a week between Las Vegas and Long Beach, Calif.
"We're really excited about JetBlue coming into the market," Ader said. "We're hoping they eventually offer some long-haul routes (from its John F. Kennedy International Airport hub in New York). That would be a grand-slam home run for Vegas."
Minneapolis-based Northwest Airlines has dropped one round trip to each of its Detroit and Minneapolis hubs in the last two months. However, Spirit Airlines will pick up some of that capacity with its Detroit round trip.
While international service capacity still trails 2001's numbers, several carriers have added flights to and from foreign destinations.
Japan Airlines operates three flights a week between Las Vegas and Tokyo, down from the five a week it had prior to Sept. 11, and Virgin Atlantic has two flights a week between Las Vegas and London, down from three. Both carriers plan more increases this summer.
In addition, America West added four flights a week to Mexico City last month and Singapore Airlines plans three flights a week between Las Vegas and Hong Kong beginning in August.
Ader said international capacity is slower to rebound than domestic travel because most foreign carriers are in a more challenged financial state and they tend to focus on their domestic markets before adding international routes.
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