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Benjamin Spillman

McCarren traveler numbers continue to fall

28 October 2008

LAS VEGAS, Nevada -- The number of people flying to and from Las Vegas fell 13.2 percent in September to 3.37 million, the largest year-over-year decline since the months following Sept. 11, 2001, and the 11th consecutive monthly dip.

It's another major indicator that the woes of the airline industry, dire economic news and an emerging recession are battering a Southern Nevada economy that blossomed with cheap oil, easy consumer credit and the boom in home and property values.

Airlines deliver about half of the nearly 40 million people who visit Las Vegas annually. And last month their results were dismal compared with September 2007, which appears now to be near the end of the boom that began when the local economy roared back from the post-Sept. 11 recession.

"As the economy weakens, it creates more uncertainty," US Airways President Scott Kirby said recently during a discussion of the airline's quarterly earnings.

The uncertainty translated to fewer Las Vegas passengers for nearly all the major carriers at McCarran International Airport.

Business for Southwest, the largest carrier at McCarran, fell 8.7 percent to 1.2 million arrivals and departures.

US Airways, the second-largest carrier, posted a 30.6 percent decline, largely due to major capacity cutbacks set into motion months ago as a reaction to high fuel prices and a worsening economic outlook.

United was down 8.3 percent, Delta fell 5.9 percent and American fell 3.1 percent.

Even Las Vegas-based Allegiant, which is one of a small number of successful domestic airlines, had its traffic fall 4 percent for the month.

For the year, traffic at McCarran slipped further behind last year's pace and now stands at 34.1 million through September, down 5.7 percent from the same point last year.

Individual airlines aren't faring much better.

Southwest is down 0.6 percent through September to 12.1 million arrivals and departures. US Airways is down 22.3 percent, United is down 7.2 percent and Delta is down 3.6 percent.

American, with a 1.1 percent increase through September, is the only top five McCarran airline to show improvement over 2007. Allegiant, which is just outside the top five, is up 2.4 percent on the year.

On the international side, overall numbers from Terminal 2 are up 5.7 percent on the year but down 2.9 percent in September.

Discount Canadian carrier WestJet continues to show strong increases at McCarran. The airline is up 59.1 percent on the year and increased 59.6 percent in September.

The continued bleak economic news is clearly affecting Las Vegas traffic, US Airways officials said.

"When the headlines are bad, bookings for 60 days out are weakening," Kirby said.

Also, with fuel prices still high relative to their overall history, customer reluctance to pay high fares to travel to Las Vegas makes it unprofitable to serve the market.

"You need in excess of 100 percent load factor to break even," Kirby said, referring to the rate that describes the percentage of full seats on a given flight.