McCarran continues slow upward climb

The passenger count at McCarran International Airport continued its slow rebound with a 2.2 percent gain in March.

The jump from March 2010 announced Friday by officials fits the prediction airport managers made last year of slightly higher traffic during the first half of this year. Passenger traffic had a small decline in the second half of 2010.

Now that the big flight reductions by US Airways are more than a year old, the largest drag on year-over-year passenger comparisons has gone away.

But in a looming threat to the airline industry, analysts count six broad fare increases, plus several other attempts that didn't stick, to try to offset rapidly rising fuel costs.

Several airlines reported average revenue gains for March running close to 10 percent, a reflection of the ticket price hikes.

"With oil prices at (current) levels, there will be more price increases to come, in our view," Deutsche Bank analyst Michael Linenberg wrote in a report.

However, he added, "demand has thus far remained resilient despite the increased pricing."

Drawing more people by air has been a concern of Strip resort operators the past three years as flight schedules contracted. In recent weeks, airlines have started to put more planes in the air but trimmed their growth plans because of fuel prices.

The passenger count for local market leader Southwest dropped 0.2 percent in March even with 31 more flights per week than last year.

United continued to cut seats into Las Vegas by flying smaller planes on nearly the same number of flights, leading to a passenger count reduction of 19.1 percent. But United spokesman Charlie Hobart said some traffic has been shifted to the commonly owned Continental, which carried 4.4 percent more passengers. Combined, they make the third-largest carrier at McCarran, fewer than 3,000 passengers behind Delta.

Other airlines posting double-digit percentage gains included Spirit, Alaska, JetBlue and AirTran.

Canadian discounter WestJet continued its surge, adding 12 percent more passengers despite one fewer flight. Company spokesman Robert Palmer attributed the fuller planes to several factors, including the exchange rates that have boosted the value of the Canadian dollar a few cents higher than the U.S. dollar and an economy that weathered the recession much better.

Further, the winter at least seemed to drag on longer this year.

"People were just fed up and wanted to get away," he said. "When you are sitting knee deep in snow, Las Vegas is a tremendous attraction."

In Phoenix and Palm Springs, he said, Canadians have taken advantage of the exchange rates and depressed real estate markets to purchase second homes, generating extra passengers. He was not sure if this was true in Las Vegas.

Starting with seven flights a week from Toronto in September 2005, WestJet has expanded to 73 a week from 11 cities spanning Vancouver to Montreal during the high season. In summer, the schedule drops to 56 flights and six cities.

This has been enough to double the passenger count of archrival Air Canada and run ahead of five domestic carriers at McCarran.

International carriers mostly posted higher numbers, led by the more than tripling of AeroMexico as it filled some of the gap left by the demise of Mexicana. Virgin Atlantic's service to London saw an 11.6 percent drop, although British Airways was up 2.6 percent.

During March, 3.56 million people went in or out of McCarran; the airport had 9.65 million passengers in the first quarter.

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.