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Tour Operator Air Vegas Shutters Operations

Air Vegas Airlines, a family-operated air tour operator that has specialized in scenic flights over the Grand Canyon for 28 years, has closed its doors.

Jim Petty, president of the airline, the second-largest air tour operator in Southern Nevada, said he issued the last paychecks for 85 employees on Oct. 1 when the company ceased operations. About 12 employees have remained to complete the shutdown and to operate a sister company, Grand Canyon Express, which will continue to offer support services for air and ground tours of the canyon.

"That day was one of the worst I've ever had to go through because there were people who have been with the company for as long as we've been open," Petty said. "Most of them said they understood and that this was the best place they'd ever worked."

Passengers who had reservations on Air Vegas -- most of them tourists from overseas -- were directed to other Grand Canyon tour operators, including market leader Scenic Airlines.

Air Vegas and other air tour operators are based at the North Las Vegas Airport.

Chad Dixon, president of Scenic, said passenger volume normally drops by about 10 percent from September to October each year, but the company has experienced an 18 percent increase this year with the closure of Air Vegas.

Dixon also is taking over as chairman of the board of trustees of the Washington-based U.S. Air Tour Association, a position Petty had held.

Air Vegas, which flew about 300 passengers a day over the Grand Canyon, closed its doors as part of a settlement reached through a U.S. Bankruptcy Court agreement.

AVI Inc., parent company of the airline and a subsidiary of Air Vegas Enterprises Inc., filed for Chapter 11 bankruptcy protection in April. Under terms of the settlement, the airline turned eight of the nine Beechcraft C-99 twin-engine turboprop tour planes it operated back to an aircraft leasing company to satisfy more than $1 million in debts, according to Bankruptcy Court filings.

AVI's board voted to file for bankruptcy protection when it fell behind on four lease payments totalling $360,000 to Pacific Aircraft Finance LLC.

Petty said the company held on to one plane and will operate it periodically so that the airline can maintain its federal operating certification. He said as long as the company continues to fly it can remain certified. Petty hopes to attract new financing to put Air Vegas back in the air someday.

Petty said in an interview in May that the summer of 2004 was destined to be profitable, since international tourist traffic has been rebounding.

Generally, fixed-wing aircraft tours like those offered by Air Vegas, Scenic and Vision Air, are favored by Asian and European tourists, while domestic travelers lean toward helicopter flights.

Most scenic tour aircraft are equipped with sound systems that play tapes or discs with descriptions of the tour in a variety of foreign languages.

Dixon, whose company flies about three times the number of passengers as Air Vegas, said Scenic removed some of its aircraft from its fleet after demand dropped abruptly after 9/11 to bring capacity closer to anticipated demand.

Scenic currently operates 16 19-passenger deHavilland Twin Otter twin-engine turboprop planes. The planes have their wings over the fuselage and are specially equipped with large windows to enhance the air tour experience.

"When you stop operating, the customer base has to filter in somewhere," Dixon said. "Some will seep into the helicopter companies, but the majority come to us and to Vision."

In his role with the U.S. Air Tour Association, Dixon will head a group faced with a number of issues. Tour operators have been at odds for years with environmental groups that advocate noise abatement policies in national parks.

The association has been the primary voice of the industry in its fight against the implementation of no-fly zones and other restrictions that they say have hurt business.

Also newly appointed to the association's board is John Sullivan of Sundance Helicopters. Several Arizona-based tour companies that operate in the Grand Canyon also are represented on the board.

Copyright © Las Vegas Sun. Inc. Republished with permission.

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