America West could help LV tap Chinese market

A new alliance between America West Airlines and China's largest international air carrier could open a largely untapped market for Las Vegas.

Phoenix-based America West, the No. 2 carrier at McCarran International Airport by passenger volume, will coordinate schedules, share frequent flier programs and reservation systems and develop joint marketing programs with Air China if a tentative agreement reached Tuesday is approved.

William Franke, chairman of America West, explained some of the details of the alliance and why agreements between rival airlines are becoming so popular in a brief stop in Las Vegas Tuesday night. Franke and Richard Goodmanson, president of the airline, were in Las Vegas to tell employees the company had won a customer satisfaction award from J.D. Power & Associates for the second consecutive year.

Las Vegas was the last stop on a three-city road trip for the executives, who made the announcement in America West hub cities of Columbus, Ohio; Phoenix and Las Vegas.

America West's program with Air China will develop seamless travel for passengers from Beijing to San Francisco and, eventually, Los Angeles. America West will coordinate its schedule to accommodate arrivals and departures to the West Coast with flights to Las Vegas and Phoenix.

America West has a similar arrangement with Eva Air, a Taiwanese carrier that operates between Taipei and Los Angeles and San Francisco.

Air China signed agreements with three other U.S. airlines: Northwest, Alaska and America West's domestic alliance partner, Continental Airlines.

The accords should be ready for implementation as soon as the carriers are granted government approval, said Northwest's Michael Levine, executive vice president-marketing and international.

"This is the real genius of the alliance concept," Levine said. "Air China, Northwest, Continental, America West and Alaska airlines working together can provide nonstop service to more than 60 percent of the U.S.-China market."

Continental President Greg Brenneman said the accord provided "the first opportunity for Continental to have access into China. I think it's a market not only for today but really the market for the 21st century."

"This will give Air China a strong U.S. flight network to serve our expanding international customer base," said Yin Wenlong, Air China Group chairman.

Of the four U.S. carriers, Minnesota-based Northwest is the only one that flies directly to China, with five weekly Detroit-Beijing flights. Air China operates round-trip service from Beijing and Shanghai to San Francisco and New York's John F. Kennedy Airport, and plans to begin nonstop service between China and Los Angeles in June.

Northwest already has code-sharing agreements with Alaska Airlines and America West, and Continental has an extensive relationship with America West. In addition, Northwest announced in January it would buy a $519 million stake in Continental in a deal that would link the No. 4 and No. 5 airlines' route systems. That deal is under review by the Justice Department to see if it violates antitrust laws.

"Alliances of this kind are beneficial in that they give us all the benefits of a merger without legally combining the two companies," Franke said in Las Vegas on Tuesday. "It benefits the passengers, because they have a seamless journey, from the time they make reservations through the trip and they can even accumulate frequent flier miles."

Franke said the airline benefits because it can purchase insurance and fuel less expensively through volume acquisitions by the dominant carrier at the airport. It can also manage ticket counters, gates and flight preparations for their partner. In the case of America West, Franke said, the carrier takes advantage of Continental's dominance in the Southeast, routing passengers to Continental's hub in Houston.

Northwest announced two years ago it had reached preliminary agreement with Air China to steer passengers onto each other's flights.

In addition to its U.S. and domestic service, Air China -- with 66 aircraft and 16,500 employees -- serves destinations in Asia, Europe, the Middle East, Australia and Canada.

The J.D. Power & Associates study, conducted with Frequent Flier magazine, ranked America West tops in customer satisfaction for flights of 500 miles of less for the second straight year.

Abut 50 of America West's 800 local employees cheered when Franke unveiled a plaque indicating the company had won the award twice in a row.

Southwest Airlines, the top-volume carrier at McCarran, finished fourth in the short-haul category of the study. America West was trailed by Continental, TWA, Southwest and USAirways. In the long-haul ranking, TWA was first followed by Continental, United, America West and American.

"The study revealed that in addition to being ranked No. 1, we improved in nine of the 10 categories which contributed to the overall satisfaction rating and significantly improved our performance in the long-haul category," Franke said. "With this recognition by frequent flyers for a second year, our employees have demonstrated that they don't rest on their laurels, they build on their success."

During 1997, America West's on-time performance improved by 10 percentage points as measured by the U.S. Department of Transportation and flight cancellations decreased by 50 percent, according to the company. In addition, America West ranked first in baggage handling as recorded in the 1997 Air Travel Consumer Report published by DOT.

THE ASSOCIATED PRESS contributed to this report.

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