America West's Comdex strategy illustrates its new business focus

America West Airlines' willingness to add 32 flights a day to Las Vegas during the Comdex computer convention demonstrates how eager the company is to win over business customers.

And, it emphasizes the company's commitment to profiting in the business travel field.

The company's most recent earnings report shows how America West relied less on leisure travelers for the quarter.

Less than 10 percent of the company's total revenues were generated by its leisure travel subsidiary -- though not all of America West's vacation travelers use the subsidiary when they book reservations.

An airline industry analyst said America West's hard work to improve revenue per passenger is slowly paying off.

Steve Lewins of Gruntal & Co. said the proportion of premium-paying passengers has climbed to 21 to 22 percent from 17 to 18 percent 12-18 months ago, improving profitability that contributed to a record third-quarter earnings performance reported last week.

Lewins said one of the nation's most successful major airlines sells half of its seats to business customers. They pay more because most don't book flights in advance.

"There is ample room for America West to sell higher-priced tickets," Lewins said in a report after the issuance of the company's quarterly earnings.

America West Holdings Corp., parent company of the airline and its affiliate tour packager, last week reported profits of $21.9 million or 49 cents a share on revenues of $485.4 million.

The company also announced that it would add flights between the West Coast and Las Vegas to accommodate additional passengers anticipated for the Comdex show that runs Nov. 15-20. The airline will add up to 32 daily flights between Las Vegas and Los Angeles, San Francisco and San Jose, Calif., during the peak days of the show.

An airline spokeswoman did not say if America West is taking flights away from another route to add the special Comdex flights. Patty Nowack said the company has additional aircraft at its disposal to fill in when planes are grounded for maintenance.

Airlines commonly juggle their schedules to meet peak demands, such as adding flights to Colorado for the ski season or more planes to Alaska in the summer months.

Nowack said America West's revised scheduling plan is only for the week of Comdex. Some local resort industry officials have been critical of America West's cutting flights at a time when tourism volume is slumping. But the airline has responded that demand has not been high enough to warrant additional flights.

Besides, America West's tourism division, The Leisure Co., reported a 136 percent increase in third-quarter profits despite lower revenues. Las Vegas vacation packages are a large segment of the company's tourism product.

In last week's earnings report, The Leisure Co. reported $5.9 million in pretax income for the quarter. The company said it is emphasizing higher margin products and a reduction in volume-related costs. Revenues for the quarter fell from $54.8 million to $45.2 million for the quarter, another indication of America West depending less on vacation package traffic.

Meanwhile, long-haul air carriers that serve Las Vegas say they aren't altering their equipment strategies in light of financial distress overseas.

Representatives of United, American, Northwest and Delta -- all companies that fly routes to Asia and South America -- say they aren't redistributing their jumbo jets to domestic routes.

The four airlines reported they are continuing to fly the same size planes they've flown to McCarran International Airport in previous months, even though business is off in foreign markets.

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