LV's bid for London air service delayed

The U.S. delegation's walkout on aviation talks with Great Britain this week will delay Las Vegas' bid for nonstop service to London.

But Gov. Bob Miller said Nevada hasn't made its last play in the bid to link the state with Europe's most important international gateway.

While the Las Vegas Convention and Visitors Authority's Bill Mahaffey said both sides were disappointed with the abrupt turn of events on Wednesday, Miller, who arrived in London on the day of the walkout, said the state is continuing its scheduled meetings with airline executives and mulling its options.

Today, he heads for Brussels for talks with Sabena Airlines, the parent company of the City Bird discount air carrier.

Meetings originally planned with KLM Royal Dutch Airlines in Amsterdam on the last leg of the trip were canceled late last week. Because it would be more expensive to rewrite plane tickets, Miller is committed to the Amsterdam stop and probably will meet with tour industry representatives there.

Prior to the London stop, Miller visited Munich and Frankfurt and the governor said there was a high level of interest from travel officials there about the new resorts coming on line in the next two years.

Circus Circus Enterprises and the Hilton Hotel Corp. had their own representatives there to talk about Mandalay Bay and the Paris hotel-casino, respectively, and Miller discussed Bellagio, the Venetian and the new Aladdin hotel-casino project.

"It's important to note that the obstacles have not been directed at our situation," Miller said of the new developments in the British aviation negotiations. "It's been quite obvious to us that the European people are very interested in what Las Vegas is doing."

Miller also said he is mindful that the best possible scenario for Nevada would be for an "open-skies agreement" to be reached between the United States and Great Britain. Because Great Britain would not consider open skies, the U.S. delegation, in London for three days of bilateral talks, got up and left.

An open-skies agreement would give American companies access to whatever airport they choose to serve in Great Britain and British companies access to any American city. Under an open-skies pact, the only obstacle that would remain would be to negotiate the number of take-off and landing slots available at the two most popular airports, London's Heathrow and Gatwick.

The U.S. delegation had hoped it would have some leverage by allowing a controversial strategic alliance between British Airways and American Airlines to proceed in exchange for open skies. The British are fearful open skies would cut into profits of the British companies hauling passengers and freight.

"What we're hearing is that the European Union may be able to apply some pressure to Great Britain (to soften its position) and that will lead to negotiations resuming," Miller said. "We've also talked to our congressional delegation about some possible solutions there, but that would take a lot longer. We want to see out the process we have."

Miller did not offer specifics on what Nevada's four legislators could do.

In the meantime, Miller continued with scheduled meetings with airlines in Great Britain and the British minister of transportation, former actress Glenda Jackson. Conversations included briefings on some of Southern Nevada's newest attractions.

While trans-Atlantic carriers were consulted, Miller said representatives of Las Vegas' two largest airlines, Southwest and America West, were at meetings. While those airlines wouldn't be players in London-Las Vegas service, they have partners and alliances developing packages that are enticing British travelers to consider Las Vegas vacations.

The meetings with the trans-Atlantic haulers were also an opportunity to commiserate.

"With the walkout, they're pretty much in the same boat we're in," Mahaffey said. "They are just as unhappy as we are because they want a piece of that pie as well."

Mahaffey said the protocol of the meeting dictated that all of the approximately 45 Americans attending the talks follow the lead of the federal negotiators in the walkout. In addition to airline representatives, there also were several union officials keeping an eye on labor issues and representatives of other U.S. gateway cities in the same position as Las Vegas.

"That's what makes the walkout that much harder on us," Mahaffey said. "To our detriment, we are strictly a tourism city. When we're competing against Washington and Chicago, we're working against cities and airports that serve business and government centers as well as tourism. Our job of selling the route is much harder."

Two airlines in limbo are American and British Airways, whose strategic alliance plans have been damaged by the walkout.

Miller acknowledged that Virgin Atlantic Airlines remains the best bet for Las Vegas securing direct nonstop service from London. Be he said he hoped that once such a route was established that British Airways would take a closer look at Las Vegas. The company hasn't expressed much enthusiasm for Las Vegas, but a Virgin Atlantic success could change that.

In the meantime, other airlines are waiting because approval of the BA-AA alliance could set other wheels in motion for them.

"We're looking at early next year before we'll get a decision," said Michael Whitaker, director of international and regulatory affairs at UAL Corp.'s United Airlines. "Until the issues of the slots are resolved, there's no incentive from either side to make concessions on open-skies."

BA and American have been asked to cede hundreds of landing and takeoff slots at Heathrow, the world's biggest international airport, for approval of their alliance which will dominate 60 percent of trans-Atlantic traffic. They are losing time as competitors scramble to form rival groupings to boost revenue and broaden their reach.

Expectations that final U.K. and U.S. rulings on the alliance would occur later this fall were now "overly optimistic," said Whitaker. "The talks are going so slowly, one might think they had stalled."

The negotiations will remain deadlocked while the issue of slots and which carriers will get them is unresolved, said Whitaker, adding the U.K. is likely to approve the European Union recommendation that 267 of the two airlines' slots be given up. The U.S. Department of Justice has asked for 330 slots, said Whitaker.

Continental Airlines Inc., a U.S. airline pressing for greater access to London's airports, said it didn't expect officials from Britain's Department of Transport, Environment and the Regions and the U.S.'s Department of Transportation to reach a resolution on a treaty this week.

The three-day talks in London come ahead of DOT hearings in Washington Oct. 26-28, on antitrust immunity for BA and American. The hearings give would-be alliance partners, rival carriers and consumer groups an opportunity to present their arguments for and against the alliance in a public forum.

Six U.S. airlines, including No. 1 UAL's United Airlines and No. 3 Delta Air Lines Inc., last month asked U.S. Secretary of Transportation Rodney Slater to withhold approval for the BA-AA alliance until there are assurances that other carriers will be able to adequately compete in the lucrative U.S.-U.K. market.

Passenger traffic in that market totaled almost 15 million last year. An alliance between BA and AA would give the carriers two of every three passengers using those routes.

"Needless to say, we are very disappointed that no constructive conclusions were reached," said the LVCVA's Mahaffey. "But nobody expected it to be a done deal in the first wave anyhow."

"We would have loved to have been here on the heels of an agreement," Miller added. "But it looks as if it's going to take a little longer."

SUN wire services contributed to this report.

archive