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McCarran's flying high, but airlines' bottom lines are taking a hitThrough natural or man-made disasters, through the fluctuating dollar and rising oil prices, they still come. Whie airlines struggle with increasing fuel costs, McCarran International Airport is less concerned with oil and more concerned with how to accommodate the rising numbers of travelers. "We are seeing tremendous volume of passengers into our airport," McCarran Airport spokeswoman Elaine Sanchez said. "It is a good thing for our community."
These large increases follow a few years of flat growth following the terrorist attacks in 2001. After a few months of double-digit declines following 9/11, the airport rebounded to post only a .5 percent decline in 2002, followed by a 3.6 percent increase in 2003 before the two years of record-setting growth. BACK TO PRE-9/11 LEVELS "We're actually seeing more and more people out on the road, both for conventions and for regualr business," Chief Operating Officer and Executive Director of National Business Travel Association Bill Connors said. "We're back to the levels we were pre-9/11." Airport officials point to a maximum number of 53 million passengers as airport capacity. Reaching that number as early as five years from now, airport administrators have $3 billion for construction projects to accommodate the growth. But being in the middle of heavy development, the one thing the airport is not able to do is build more runways. "Everything is dependent on the hotel rooms that are going to be built in the future," Sanchez said. "That is really where our growth comes from." While the airlines may still be lining up over Lake Mead to land in the valley, many are suffering from the rising costs of fuel. Domestic airplane fuel prices have risen from $1.27 in January 2005 to $2.15 in October, a 69 percent increase, according to the U.S. Department of Transportation Bureau of Transportation Statistics. Rising fuel prices cost United States-based airlines billions of dollars. While some airlines hedge against these spikes, many do not. "Despite the wild gyrations in the oil prices, some of the airlines were able to hedge and keep things stable," Connors said. Every penny per gallon price increase in jet fuel adds $190 million in additional fuel costs, according to an October report from the National Business Travel Association. DELTA LOSING RIDERSHIP Delta Air Lines was one of the hardest hit carriers, filing for Chapter 11 bankruptcy protection in September. The Atlanta-based airline, which does not hedge fuel, saw an 18 percent drop in passenger traffic to McCarran in December over the previous year. Delta brought 2.6 million travelers to the valley last year, a decrease of 5 percent from 2004. The company is now reporting that it needs to save $3 billion by cutting costs and raising revenue to continue. Even though Japan Airlines and Jet Blue are among the carriers that have announced cutbacks to McCarran in the past couple of years, there always seems to be other airlines willing to step in and take available gates. JAL announced earlier this month it was dropping its Tokyo-to-Las Vegas route along with three other unprofitable international routes to help the company save against rising fuel costs. The airline only brought 1,800 passengers to the area in 2005. Fortunately for McCarran, the airport's largest carrier had a strong fourth quarter. Southwest Airlines brought 13.8 million travelers to the area last year, a 6.8 percent increase from 2004. In January, the Dallas-based company posted fourth-quarter earnings of $86 million -- a 54 percent increase over the previous year. No matter what the landscape, for now, they still seem to come. aknightly@lvbusinesspress.com | 702-871-6780 x316 |
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