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July 24, 2014

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Casinos see Southwest’s acquisition of AirTran as win for Las Vegas

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Southwest Airlines planes sit at McCarran International Airport.

Gaming executives are optimistic that Southwest Airlines’ acquisition of AirTran Airways will eventually bring more flights to Las Vegas, countering some analysts’ predictions that the deal won’t significantly alter the local aviation landscape.

Southwest, the busiest carrier at McCarran International Airport, said AirTran will function as an independent company until its operations are integrated, a two-year process once the deal closes.

So it’s too early to tell exactly how the blending of the airlines will affect Las Vegas. But with AirTran, Southwest will pick up 37 cities and add 138 aircraft to its fleet.

“I think in the long run, it’s going to be good,” MGM Resorts International spokesman Alan Feldman said. “Southwest has been an amazing partner over the years and we’ve also worked with AirTran, both in Mississippi and here.”

Feldman is hopeful that eventually Southwest will offer flights to and from markets served by AirTran.

AirTran primarily uses a hub-and-spoke model, meaning a majority of the airline’s flights are through its key cities of Atlanta, Orlando and Milwaukee, with connecting flights to 67 other airports. By contrast, most Southwest routes are point to point, meaning flights operate between any of the 69 destinations on Southwest’s map.

AirTran’s routes in the West include cities served by Southwest with nonstop flights to Las Vegas — Los Angeles, San Diego, San Francisco, Seattle and Denver. Prospective cities on the AirTran route map for Las Vegas include Wichita, Kan.; Des Moines, Iowa; Moline-Quad Cities, Ill.; Bloomington-Normal, Ill.; and Memphis, Tenn.

Gary Thompson, a spokesman for Harrah’s Entertainment, said he views the merger as positive for Las Vegas, but it’s difficult to quantify how significant it will be until more details are explained.

Assuming Southwest develops its Southwest Vacations airfare and hotel packaging product as it has for destinations such as Las Vegas and Reno, new AirTran routes could be a plus for companies such as MGM Resorts, Harrah’s and Boyd Gaming.

MGM has properties in Tunica and Biloxi, Miss.; Harrah’s is in Tunica, Biloxi and Atlantic City, and Boyd is in Memphis, Tunica and Atlantic City — all destinations served by AirTran.

Feldman said MGM doesn’t do enough corporate travel between resort destinations for the AirTran deal to be of any significance to his company’s business travel.

Southwest, which operates from McCarran’s B and C gates, has 206 daily flights to and from Las Vegas, a 44.6 percent market share. For the first seven months of 2010, Southwest flew 9.1 million passengers to and from Las Vegas. From McCarran, Southwest flies to 57 markets, the most of any carrier at the airport.

Comparatively, AirTran has six daily flights to and from McCarran’s D gates, 1.2 percent of the market share. In seven months, AirTran has flown 303,597 passengers with nonstop flights to Atlanta and Milwaukee with one-stop service to Indianapolis.

Gary Kelly, chairman, president and CEO of Southwest, said the integration of AirTran into the Southwest system would eventually result in 25 percent growth for the airline, which carries more domestic passengers than any U.S. airline.

Based on Southwest’s projections for the integration of the airlines, Las Vegas would be the busiest destination in the system — but just barely. Southwest, which counts flights that operate five or six times a week as “daily,” said it would have 230 daily flights when the merger is completed. Chicago’s Midway International Airport would have 228 daily flights at the completion.

Still, moving into the Atlanta market is the big prize for Southwest. Hartsfield-Jackson Atlanta International Airport, the United States’ busiest, is in the heart of the largest population center not served by Southwest. The acquisition will also give Southwest a firmer foothold in three markets it views as critical to the long-term success of the airline — New York, Washington, D.C., and Boston.

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  1. Well said dipstick.