"Ivanpah airport can't come fast enough"

Friday, October 13, 2006

Ivanpah airport can't come fast enough 
By Richard Velotta
In Business Las Vegas (NV)
 

DEER VALLEY, Utah - An independent aviation forecast confirms what McCarran
International Airport administrators are fearing: that the airport's growth
is on track for exceeding its planned capacity well before a new airport in
the Ivanpah Valley would be on line. 

Mike Boyd, who heads the Boyd Group, an aviation consulting and forecasting
company based in Evergreen, Colo., projects a 13.4 percent growth in
passenger traffic at McCarran by 2012. Boyd's figures, announced this week
at the 11th-annual aviation forecast conference here, says McCarran is
expected to enplane 26.2 million passengers a year in six years. 

Since most passengers at McCarran are counted twice for their airport usage
- once when they arrive and once when they leave - Boyd's projection would
mean the Las Vegas airport would serve 52.4 million people. 

Airport officials have said McCarran has a capacity of about 53 million
passengers, but they're hoping that a new airport proposed south of the city
would relieve some of the traffic. But the Ivanpah airport isn't expected to
be built and operational until 2017 or 2018. 

Clark County Aviation Director Randy Walker already sounded the alarm on
capacity issues earlier this year when commenting on growth issues
associated with MGM Mirage's Project CityCenter, Boyd Gaming's Echelon Place
and an expected project by Harrah's Entertainment. 

According to Mike Boyd's forecast, Las Vegas' growth prospects would rank it
as the seventh fastest growing hubsite airport in the country behind
Detroit, Dallas-Fort Worth, Chicago's Midway Airport, Washington's Dulles
International, Philadelphia and Phoenix. 

Boyd defines "hubsite airports" as those that have some connecting traffic.
Walker says Clark County prefers flights and airlines that deliver
passengers to Las Vegas and not those that connect passengers to other
cities because of the airport's importance to the city's resorts. Walker
often notes that McCarran is the No. 2 operation and destination airport in
the country, meaning that it is only behind Los Angeles as an airport for a
passenger's end destination. 

Also making an appearance in Boyd's forecast of the 25 fastest-growing
airports in the country was Reno-Tahoe International Airport, which is
projected to have an 18.7 percent growth rate over the next six years, with
3.1 million enplanements projected by 2012. It's ranked 20th in the nation
for all markets. 

Boyd said the leading growth market is the Sarasota-Bradenton airport in
Florida, which is expected to grow by 33.1 percent to 976,000 enplanements
by 2012. 

Most airport growth nationwide is expected to be driven by community
investment, such as new manufacturing and production plants in their
respective cities. In the case of Las Vegas and Reno, Boyd said
quality-of-life factors are generating most of the community growth. As he
said at his conference last year, water development issues are the wild card
for the city and its airport sustaining the forecasted growth. 

The state's vibrant tourism industry also is a key factor. McCarran had
back-to-back months of airport traffic exceeding 4 million passengers in
July and August. Gaming revenue exceeded $1 billion in August, the sixth
time it has hit that level. 

Boyd said the reason traffic is growing nationwide is that several airlines
are retiring passenger jets with fewer than 50 seats in favor of
larger-capacity single-aisle jets. Boyd also is counting on bumps in
international traffic, particularly the Chinese market, to expand passenger
counts across the United States. 

But he also cautioned that ever-volatile fuel costs, a slowing in the
economy and increased competition among low-cost carriers and a resultant
pull-back of capacity by those carriers could cloud the growth picture. 

Boyd said the low-cost carrier market is getting to be an increasingly
hostile competitive environment and that there already are signs that growth
is slowing and change is occurring. 

Low-cost carriers provide about 71 percent of the seats coming into the Las
Vegas market - 78.3 percent if you count United Airlines' Ted service as a
low-cost carrier. 

Both AirTran and JetBlue have deferred orders on some aircraft and industry
stalwart Southwest Airlines has entered two big-city markets, Denver and
Washington's Dulles International Airport, to expand market share. Southwest
attributes much of its operational success in the past to staking out niches
at secondary airports that are cheaper to operate from, such as Midway
Airport instead of O'Hare in Chicago and Manchester, N.H., and Providence,
R.I., instead of Boston. 

Boyd said Southwest, the largest operator at McCarran with more than 1
million passengers a month, may try some additional unconventional
approaches in order to bolster market share. 

The company already has completed a six-week trial, experimenting with
assigned seating. One of Southwest's trademarks is its first-come,
first-served approach to seating on flights. 

During the test, on some routes flown from San Diego, Southwest determined
that there were no conclusive results for the experiment. 

John Jamotta, senior director of schedule planning for Southwest, said the
airline appears to be headed back to the drawing board when it comes to
assigned seating because about as many people disliked Southwest's
assigned-seats methods as people who liked them. 

Whitney Eichinger, a spokeswoman for Southwest, said additional tests may be
forthcoming as the company experiments with other boarding routines. 

"In the San Diego tests, sometimes planes were boarded faster than usual,
but sometimes they weren't," she said. "There was nothing conclusive." 

Eichinger said the company may tinker with some procedures, but the airline
is far from reaching a decision about whether to assign seats or keep the
current process. 

Boyd also predicted Southwest would study operating another aircraft type in
addition to the Boeing 737. The airline often touts the operating
efficiencies from crew familiarity, to training, to maintaining an inventory
of spare parts as the reason it has stuck with the twin-engine 737, Boeing's
most utilized aircraft. 

Eichinger said Southwest is always looking at options to gain more fuel
efficiency in operating their planes, but there have been no plans made to
look at other aircraft types. 

Boyd suggested that Southwest could have the leverage to work with Boeing to
develop a 737 model using composite technology that is being used to
construct the Boeing 787 Dreamliner jet, which is expected to be introduced
in 2008.

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