Soon two will be flying London-to-Vegas

By Richard N. Velotta, Buck Wargo

Tuesday, May 26, 2009 | 2 a.m.

Has Las Vegas become the latest battleground in a 25-year-old feud between British Airways and Virgin Atlantic CEO Richard Branson?

British Airways will begin nonstop daily flights to McCarran International Airport from London’s Heathrow International Airport on Oct. 25, a plan that has been on the radar of McCarran and the Las Vegas Convention and Visitors Authority for nearly a decade.

What does British Airways see in the Entertainment Capital of the World that it didn’t see 10 years ago?

Branson has built his Las Vegas success by flying nonstop routes from the more remote Gatwick International Airport. On numerous occasions Branson has been asked about the prospects of a Heathrow-McCarran operation. He’s accused British Airways of monopolizing Heathrow and blocking his airline’s ability to get more flight slots at the airport 14 miles from central London.

So is British Airways’ new Las Vegas service just another part of the BA-Virgin battle? Is there enough passenger volume to sustain two nonstop flights between London and Las Vegas?

John Lampl, a British Airways vice president, said the new service is all about capitalizing on an opportunity with a product he thinks is superior to what his competitors offer.

As for the depth of the market and the ability of the route to sustain two daily nonstops, British Airways is more networked with the rest of Europe and will capitalize on the LVCVA’s marketing of the destination throughout the continent as a means to spur traffic. In other words, British Airways is hoping that it won’t just be Britons who will be on its flights to Las Vegas, Lampl said.

But if there isn’t enough traffic to sustain both routes, the result could be devastating. Northwest Airlines carried passengers on a Boeing 747 twice a week between Tokyo and McCarran — the first Las Vegas route overseas. The service quickly evaporated when Japan Airlines began competing. When the economy skidded, Japan Airlines pulled out, and Las Vegas was left without nonstops to Asia until Korean Air began flying to and from Seoul.

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Owners of more than 80 percent of the homes bought in Las Vegas from 2005 to 2007 are underwater, a reflection of the danger that lingers for the housing market.

The real estate Web site zillow.com reported 67 percent of Las Vegas homeowners owe more on their homes than the houses are worth — the No. 1 ranking in the nation. Stockton, Calif., was second with 51 percent. Twenty-one percent of the nation’s homeowners are underwater, the report said.

The rising number of homeowners underwater has raised the specter that many will walk away from their homes and let them go into foreclosure. Las Vegas is ranked No. 1 in the nation in foreclosure filings, and that has prompted prices to fall more than 50 percent from their peak in June 2006.

“I think we are getting to the point where people are realizing they don’t want to be stuck in this house where they literally are buried and the prices aren’t going to come back in any realistic time frame,” said Richard Plaster, president of Signature Homes. “What I see is the number of foreclosures are definitely going to increase.”

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The price of an existing home in Las Vegas in April fell to its lowest level since 1998, but the decline generated the most sales since the peak of the market in June 2006, according to statistics released last week by SalesTraq.

The median price of existing homes fell nearly $10,000 in April to $125,000, a 57 percent drop from the peak of the market at $289,500 in June 2006. The average price per square foot was $78.58, a 42 percent drop from $135.73 in April 2008.

In April, 4,063 existing homes sold, 437 more than in March and 78 percent more than in April 2008, according to SalesTraq. That’s the most since 4,198 in June 2006.

Foreclosures are driving the price drop, and account for 62 percent of the sales in April. The median price of homes sold by lenders was $115,000, or $30,000 less than sales of nonbank-owned homes, SalesTraq reported.

Longer versions of these stories appeared in this week’s In Business Las Vegas, a sister publication of the Sun.