Friday, Feb. 20, 1998 | 10:32 a.m.
After thinning out the least profitable routes from its Las Vegas hub, America West Airlines says it's done cutting flights and is committed to expanding vacation packaging in the company's second quarter.
In the last four months, the Phoenix-based carrier ended service to five of the company's weakest markets from Las Vegas and, executives said, have been unfairly characterized as abandoning the market.
"Las Vegas is hugely important to America West," Chief Financial Officer Doug Parker said in a telephone interview Thursday. "We're sensitive about being portrayed as an airline that's not committed to Las Vegas only because it's a very important market to us."
The remarks came in the wake of analysts' reports saying America West has scaled back from the less-profitable leisure market offered by Las Vegas in favor of the more lucrative business travel segment available in other cities, most notably Phoenix.
Company officials did not comment last week when it was reported that America West reduced its flights from 86 per day with a capacity of about 12,084 passengers to 80 per day with a capacity of 11,258. The total has dropped this month to 77 daily flights with a capacity of 10,905 passengers, according to McCarran International Airport statistics.
During the drop, company stock has reached a 52-week high.
America West, the No. 2 carrier at McCarran behind Southwest Airlines by passenger volume and the company that offers the most direct destinations for local fliers, was cited by some Wall Street analysts as being among five long-haul air carriers that reduced seat capacity to Las Vegas in the 1997 calendar year.
Company executives said that while those statistics are accurate, the airline should not be characterized as giving up on the city. In fact, Parker said, the company is taking steps to make its Southern Nevada service more lucrative.
In May, the company will shuffle its night-flight schedule -- America West's bread and butter in Las Vegas -- by bringing in East Coast-originating flights and coordinating all outgoing McCarran flights to about two hours earlier than the current schedule.
"Most of our Las Vegas market is night flying," Parker said. "Most airlines that fly hubs and spokes to spoke cities land in the evening and the planes sit until 7 a.m. the next day. The planes are idle for 12 hours."
But after flying routes through its Phoenix hub during the day, America West turns its attention on Las Vegas, taking advantage of the high level of activity here at night. By bringing in the night flights two hours earlier, the company hopes to lure more passengers.
Parker said the company carefully examined the 45 cities connected to Las Vegas and made decisions to cut based on passenger loads. America West's cutbacks occurred on routes to Albuquerque, N.M.; San Antonio and Austin, Texas; Colorado Springs, Colo.; and Vancouver, British Columbia. Not surprisingly, each of those cities is heavily served by discount carriers during the day.
Southwest Airlines flies directly to Albuquerque, San Antonio and Austin; Reno Air is firmly entrenched in Colorado Springs; and Alaska Airlines and Canadian serve Vancouver from Las Vegas.
The company also reduced service between Las Vegas and Omaha, Neb., and Wichita, Kan., dropping some midweek flights that had more seats empty than full. The company said on those routes, it hasn't lost any ridership -- the same number of passengers find their way to Las Vegas on fewer flights.
In addition to revamping the night flight schedule in May, the company is adding another East Coast route -- to Fort Lauderdale, Fla. That will give the company four direct flights to Florida from Las Vegas with the new route joining service to Miami, Tampa and Orlando.
America West also intends to boost its Las Vegas marketing in the second quarter of the company's current year by offering vacation packages that will operate without regard to air carrier.
John Garel, vice president of the company's leisure travel division, said The Leisure Co., a new subsidiary of the America West Holding Co., will begin operations later this year. Garel said the operation will differ from previous America West vacation packages by establishing bookings without regard to air carrier.
"We've developed a competency in selling vacation packages," Garel said, noting that the company would attempt to sell tours for Phoenix, Florida, the beaches of California and Mexico's resort destinations in addition to Las Vegas.
In the late 1980s, America West's vacation division sold $40 million to $50 million in Las Vegas trips. Garel said that volume has more than tripled in 10 years and the company is projecting double-digit increases in markets like Las Vegas in the years ahead through The Leisure Co.
Garel said he has daily interaction with representatives of the Las Vegas resort industry to discuss mutual concerns, including strategies to fill rooms at midweek, the weakest sector for the hotels.
The executive said the city's resorts could help themselves by keeping their attractions fresh, interesting and worth visiting, even in the winter.