NEW YORK--Feb. 23, 1998--Average daily seat capacity to Las Vegas for long-haul airlines continues to decrease in February, according to statistics released by McCarran International Airport on Friday, Bear Stearns notes today.
Average daily seat capacity fell 2.0% this month from January 1998,
and 8.8% from February 1997, to 27,587 seats. As Bear Stearns indicated
last week upon initiating comprehensive coverage of air service issues
in Las Vegas, there will likely be a sufficient number of gates at McCarran
to accommodate demand through 2020. But airlines
are increasingly under pressure to reduce service in leisure markets such as Las Vegas, where cheaper fares limit their profitability.
Bear, Stearns believes that a lack of air seat capacity by long-haul carriers, with nonstop flights to the central and eastern U.S., could jeopardize growth in the Las Vegas visitor base sufficient to fill the 20,000 new rooms expected to open on the Strip through the year 2000. More specifically, Bear Stearns believes that service by long-haul airlines with first class seats and nonstop flights to and from major cities could be critical in filling the over 10,000 luxury rooms (priced at $150 and over) planned for the Strip.
Air seat capacity continues to be reduced both by a decrease in the overall number of flights being offered by airlines, and by a reduction in the size of the aircraft used to serve the market.
Bear, Stearns remains encouraged by Southwest's year-over-year expansion
in flight service. Still, increased capacity from a short-haul carrier,
where neither first-class nor reserved seating are available, will be insufficient
to drive RevPAR -- especially given the large number of luxury hotel rooms
due to come on line in Las
Vegas over the next several years.
|Airline||Average Daily Seats Feb 1998||Average Daily Seats Jan 1998||Averge Daily Seats Feb 1997||% Chg. Feb-98 from Jan-98||% Chg. Feb-98 from Feb-97|
|Total / Average||27,587||28,136||30,261||-1.95%||-8.84|
Source: Bear, Stearns Co. Inc., McCarran International Airport.
Bear Stearns will continue to monitor the air capacity situation in
Las Vegas with the timely analysis and release
of information pertaining to air seat capacity, airline load factors by destination, enplanements, deplanements,
and related statistics.
Bear, Stearns Co. Inc., a leading worldwide investment banking
and securities trading and brokerage firm, is the major subsidiary of The
Bear Stearns Companies Inc. (NYSE: BSC). With approximately $14.8 billion
in total capital, Bear Stearns serves governments, corporations, institutions,
and individuals worldwide. The company's
business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, provate client services, derivatives, asset management, correspondent clearing, securities lending, and custody services. Headquartered in New York City, the company has approximately 8,700 employees located
in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, and San Francisco; and an international presence in Beijing, Buenos Aires, Dublin, Geneva, Hong Kong, London, Lugano, Paris, Sao Paulo,
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