Two Way Hard Three | Las Vegas Casino & Design Blog

Hunter,

Unfortunately the airlines appear to be slashing their schedules and dropping flights to reduce capacity all over. I recently returned from a trip to Maui and Kauai, HI & Delta changed my itinerary numerous times as they dropped flights and switched flights to smaller aircraft. Many of Delta�s flights to the Hawaiian Islands have had their equipment downgraded from wide body 767�s to smaller narrow body 757�s. While boarding a 757 in Salt Lake City for Maui the most commonly overheard comment from other passengers was �My God why are they flying such a small plane to Hawaii?...They used to use huge planes for this flight�� While the 757 certainly has no problem making Hawaii from the mainland I personally would much prefer to be on a twin aisle wide body aircraft for a flight over three hours. All the flights were full leaving few if any options if someone misses a connection. The airport most convenient for me from home is a smaller airport in Charlottesville, VA which at one time had 3 Delta �Connection� flights to Cincinnati and 3 Delta �Connection� flights to Atlanta daily. Now they have eliminated the Cincinnati flights altogether and reduced Atlanta service to two flights daily. For my next trip to Vegas I�m driving two hours to Richmond, VA because Delta has more frequency to Atlanta. The last time I checked Delta.com my flight from Atlanta to Vegas has been downgraded from a 767 to a 757.

My single biggest concern for the future of Vegas, Hawaii and other tourist destinations which rely on the airlines to bring in their customers is that if air capacity is further reduced there will be fewer bodies to gamble in the casinos and stay in the hotels. If the airlines cut more flights and use smaller planes or if one or two airlines disappear completely I would like to know where MGM Mirage plans to get the people to fill City Center without cannibalizing from all their other properties.

In my estimation the future success or failure of the resorts largely comes down to the cost of oil. Hopefully for everyone�s sake the price of oil will drop!

Posted by mike_ch

Actually, capitalism dictates that solutions don't appear until financially viable. The reason there hasn't been an alternative to oil is that it's always been more expensive to develop something new instead of just keep using oil.

So really, hopefully the price of oil DOESN'T go down until first some of the larger consumers reduce their use or find new ideas completely.

Posted by Jason Robar

I can't speak to the conditions right now, but friends were able to get 7 night packages in June for about $750 CDN a person (one package from WestJet, another separate package from US). Considering non-stop flights from Toronto cost at minimum of $550 CDN, it was a heck of a deal.

That was 2 months ago though, so things could have changed.

Posted by mike_ch

Jason: Last November around Remembrance Day I actually pulled it off for about $400, but then again I also took red-eyes both ways. Fine with me, they were extremely empty so I could take up the whole row and nobody would mind.

I 'spose next time I'll land at Buffalo and bus the rest of the way in. I did the math once and it saved me about $150 that way.

Liz Benston's article in the LV Sun isn't exactly on this topic, but it raises what seems to be a nagging question: Has the Strip gone too upmarket and too young? Will it, along with air cutbacks, hurt the Strip long term?
http://www.lasvegassun.com/news/2008/aug/08/strip-scales-some-say-goodbye/

Mike_ch: I agree that we definitely need to find alternatives to oil for our energy needs. You are probably right that if the price of oil drops back down too much then the large consumers will not invest in exploring alternatives. As a country I think we desperately need to add alternate energy sources to our national energy supply.

Unfortunately the air transport industry has no alternatives and is being killed by the high price of oil. Only the airlines which have strong fuel hedging in place with their fuel locked in at relatively low prices will be able to break even or make a profit, which at this point I believe Southwest is the only airline making any money.

If several airlines serving Vegas were to go out of business I don�t know where Vegas would make up for the lost visitor traffic. I realize that a lot of people drive in from California and other parts of the southwest, but most Vegas visitors arrive via McCarran. I�m not so much concerned that the prices of the seats are going up, but rather that there may be fewer seats altogether.

Allegiant Air is still doing well:

"Just ask the folks at Allegiant Travel Company.
The Las Vegas-based company sold small town tourists enough airline tickets, hotel rooms and novelty Elvis-style sunglasses to generate $132 million in the second quarter. That's about $12 million more than Steve Wynn made from gamblers at his $2.5 billion casino on the Strip.
More surprising is that Allegiant makes most of its money from an airline, part of perhaps the most volatile major industry in the country."
http://www.lvbusinesspress.com/articles/2008/08/13/news/iq_23138637.txt

Posted by mike_ch

To sort of bump up this topic, and reply to Aaron's comment last week, there are solutions to airlines that are now being explored. GE has a new aircraft engine that's cleaner and uses less oil, and Bombardier is developing a commercial plane that will use a lot less oil than the Boeings and Airbuses we see now.

And then there's the practical cuts, like stocking less drinks on board and replacing the painted-on livery with attached labels that weigh a lot less. Why is the Space Shuttle's fuel tank that ugly reddish? Because that's what it looks like unpainted. The Columbia only had a few flights with a white fuel tank before the paint was removed to save a lot of weight, and this same principle can apply to airplanes.

Anyway, I don't see a lot of destinations disappearing. McCarran's strength is that there's direct flights to everywhere and as a local I've enjoyed taking non-stops to just about anywhere I go, but I've taken a lot of red-eye flights with almost nobody on them in the past few years.

I think you'll still be able to go between Vegas and your city airport, but when you'll be going is going to become a lot less flexible as they stuff more people into a fewer number of flights rather than waste gas on red-eyes for 30 people.