NEW HIGHS, BUT WITH A DECLINE

McCarran International Airport set another record in 2007 by hosting 47.7 million travelers, but the 3.1 percent increase from 2006 was the lowest rate since 2002 and traffic dropped measurably in December.

The numbers are important because traffic at McCarran provides more insight to the local economy than even Nevada casinos' monthly gambling haul, which often depends on how lucky high-rollers were at the tables. Details behind McCarran's traffic figures not only show how many people are flying to Las Vegas, but where they come from and how the Las Vegas economy is coping with large-scale economic issues such as the cost of oil, global economic uncertainty, currency exchange rates and airline industry turmoil.

The figures released Monday by the Clark County Department of Aviation send a mixed message.

The combined number of arrivals and departures from McCarran was an increase from 46.2 million in 2006, the previous annual traffic record.

But the surge stalled in December when traffic dropped 3.2 percent, which also coincided with the slowest holiday season spending rates in about five years, an indication of consumer trepidation.

US Airways -- the second-largest carrier at McCarran -- led the stall with a near 26 percent decline in the final month of 2007.

The Tempe, Ariz.,-based airline also posted a fourth-quarter revenue decline last month, and its CEO expects the airline will cut seat capacity nationally as much as 2 percent in 2008. That would be on top of the 4 percent capacity it already cut in recent months.

Southwest Airlines, the biggest McCarran hauler, didn't exactly sprint to the finish.

Southwest, the airline most associated with the room boom that lifted the Las Vegas economy from the doldrums following the September 2001 terrorist attacks, managed a less than 1 percent increase for the month.

The airline decreased the number of flights to and from Las Vegas by 11 per day, a 2.5 percent reduction that totaled 76 fewer flights per week.

Thanks to savings from its fuel hedging program and fare increases Southwest managed to make a profit in the fourth quarter. But the carrier still cut routes and shifted planes from slower to more lucrative routes.

Airline industry analyst Robert Mann, president of R.W. Mann & Co. in Port Washington, N.Y., said a downturn in domestic leisure traffic is expected considering the circumstances.

"They (leisure travelers) are the least profitable or absolutely unprofitable when fuel prices rise," Mann said. "When you have corporate customers, you can generally pass on price increases."

Fortunately for Las Vegas, there were several bright spots in the annual airline figures.

Allegiant Air managed to increase its traffic to and from Las Vegas by nearly 26 percent for the year and 28 percent in December.

Ponder Harrison, Allegiant's managing director of marketing and sales, said the airline succeeded in part by tapping customers in the Midwest who weren't hurt as badly in the housing meltdown.

Allegiant flies passengers from small cities in places such as Kansas, Illinois, Wyoming and Texas to Las Vegas.

"A number of the farmers in the Heartland are doing just fine," Harrison said. "They have money to spend and Vegas is the No. 1 destination of their choice."

But it is doubtful airlines as a group will be able to tap domestic secondary markets deeply enough to offset any potential slowdowns from major feeders to Las Vegas, Harrison said.

"It is hard to do because you have to have an airline willing to go in and take the risk," he said.

Many airlines are going outside the United States for new business.

Traffic at McCarran's international terminal jumped 14.5 percent for the year and 12.5 percent in the final month. Flights from countries enjoying historically strong currencies in relation to the battered American dollar were on the uptick in 2007.

Canadian low-fare carrier Westjet increased passenger traffic at McCarran nearly 85 percent for the year to almost 370,000. Virgin Atlantic traffic increased 10 percent for the year to more than 289,000 passengers.

"A cheap dollar means lots of offshore sales opportunities," Mann said.

In addition to hosting more foreign passengers, people who tend to stay longer and spend more in Las Vegas than Americans, Clark County aviation officials made several upgrades to the airport.

In April they opened the $170 million McCarran Rent-A-Car Center, a sleek, off-site spot for picking up and dropping off rental cars.

Work also continued on a project that will add nine gates to Terminal 1 later this year and an upgrade that will add 14 gates in 2012. There was also construction on a new checkpoint that will add 12 security lanes in 2008.

"Despite the challenges of processing the millions of passengers, our team remained focused on moving a rising number of air travelers safely and smoothly through McCarran," said Randall Walker, director of the Clark County Department of Aviation.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861.

47.7 MILLION

Number of travelers at McCarran International Airport for 2007