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Discount Airlines Thrive in Las Vegas

LAS VEGAS -- The summer travel season is barely under way, but discount air carriers are already jostling for position to bring more value-minded vacationers to Southern Nevada.

Hoping to capitalize on the financial struggles of their larger rivals such as American and United, low-fare carriers have increasingly turned to airports whose low operating costs allow them to pass along discounts to the traveling public. In that regard, few destinations can compete with Las Vegas, said Ray Neidl, an airline industry analyst with New York-based brokerage firm Blaylock & Partners.

"These (discount) carriers are coming in to fill a void," said Neidl, who cited recent cutbacks by large carriers in other markets as well as the November shutdown of Las Vegas-based National Airlines. "It's a difficult market for larger airlines to operate a hub in, but it's a good point-to-point market for low-cost carriers that specialize in leisure traffic."

McCarran International Airport charges airlines about $5.07 for each enplaned passenger, said airport spokeswoman Hilarie Grey. That total is among the nation's lowest, with some airports charging fees of up to $13 per passenger for similar services such as ticketing space and gate use, she added.

Monday's announcement that Allegiant Air plans to consolidate its operations in Las Vegas by relocating its flight and maintenance operations from Fresno, Calif., was only the latest in a series of pro-Las Vegas steps taken by it and other discount carriers. Next up is Orlando, Fla.-based AirTran Airways, which on Wednesday is scheduled to begin its twice-daily service linking McCarran International Airport and AirTran's Atlanta hub.

That entry will be followed by Allegiant's June 19 debut of service between McCarran and Des Moines, Iowa. Allegiant also plans to add service to Denver, Lansing, Mich., and Fort Collins/Loveland, Colo., on July 3, 10 and 31, respectively.

"We're always looking at what a consumer's other choices are," Allegiant Vice President Mark Peterson said Monday. "People in some of those markets often have to drive more than an hour to reach a nearby airport, or use connecting service to get to Las Vegas.

"We saw there was a demand there and hope to keep that business from bleeding off to other airports."

Separately, Delta Air Lines' new discount offshoot, Song, is scheduled to begin service from Fort Lauderdale, Fla., on Aug. 25.

In addition to low operating costs, Rosemary Vassiliadis, Clark County deputy director of aviation, credited much of today's low-fare buzz to Las Vegas' ongoing popularity among travelers.

"I think airlines are getting back to basics on how they can fill airplanes and seats," Vassiliadis said. "Right now, our demand is still out there."

Spirit Airlines Chairman Ned Homfeld said the presence of low-cost carriers often leads full-fare airlines to follow suit, thereby driving overall traffic on an affected route. For example, he said combined traffic levels on airline flights between Detroit and Orlando, Fla., have increased by at least 10 percent each year since his Miramar, Fla.-based carrier began servicing that route a decade ago.

"When a low-cost carrier comes into a market, they police the prices down and more people end up traveling to that market," said Homfeld, who added he hopes to soon increase Spirit's current average of three daily departures from McCarran serving Chicago and Detroit.

In addition, the king of low-cost carriers, Dallas-based Southwest Airlines, said May 14 it will add nine new flights at McCarran later this year. Separately, New York-based discount outfit JetBlue Airways has also increased its presence at McCarran since its first plane arrived there last October.

Interstate Jet on May 29 also began offering twice-weekly service between McCarran and Lehigh Valley (Pa.) International Airport, located about 75 miles northwest of downtown Philadelphia.

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