pacomartin
pacomartin
Joined: Jan 14, 2010
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May 4th, 2010 at 2:57:30 AM permalink
The United Continental merger seems like it will initially have no effect on the Las Vegas airport. United is the 2nd airline at Vegas and now will go over a million passengers a year. Continental flew to Houston Intercontinental Airport, Newark Airport, and Cleveland (none of which United flies to).

It is probable that Cleveland may be de-emphasized as a hub since it is about 300 miles from Dulles and O'Hare and it has no international flights to Europe. But that decision will have almost no effect on Vegas since the three times daily flights to Cleveland would probably be partially replaced by Southwest.

In general Southwest is so dominant at Vegas, (it is larger than American, Delta-Northwest, US Airways, United- Continental combined) that these airlines usually only fly to Vegas if there are possible connections to an International flight.

I just don't see Vegas recovering it's lost flights anytime soon. The increase of international flights (especially to the UK) can't offset the domestic loss.
FleaStiff
FleaStiff
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May 4th, 2010 at 4:43:45 AM permalink
In a town built upon the Toke system, I wonder if the casinos ever toke the airlines?
pacomartin
pacomartin
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May 4th, 2010 at 5:30:44 AM permalink
Allegiant seems closer to the casinos than the other airlines. Their business model is only to fly to very small airports, and there are no connections. Essentially they feed to vacation hubs like Vegas, Orlando, Myrtle Beach, etc.

They also restrict flights to a maximum of about 1500 miles. Generally people don't like to pay much more for flights over 2000 miles, but costs are higher.
Nareed
Nareed
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May 4th, 2010 at 6:47:23 AM permalink
Quote: FleaStiff

In a town built upon the Toke system, I wonder if the casinos ever toke the airlines?



Not that I know of. But it's a popular urban legend. Allegedly flights to vegas a re cheaper than flights to anywhere else, because the casinos pay the airlines a subsidy. To my knowledge this is just a myth.
Donald Trump is a fucking criminal
boymimbo
boymimbo
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May 4th, 2010 at 6:55:02 AM permalink
When you book a hotel-airfare combination on an airline's website (Air Canada Vacations, Southwest Vacations), the casinos charge less than their book rate to the airline. Airlines in turn will mark up the hotel rate marginally to be somewhere between what the hotel charges them to book the room and the hotel's own posted rate... the hotel must have an agreement with the carrier for the airline to pull this off.

Southwest I believe is the only airline that will slightly reduce the airfare component of its vacation booking when you book a package with them. That is why you can only buy airfares and hotels on Southwest and nowhere else.

Casinos would have no reason to subsidize the airlines coming to Vegas unless it was receiving a direct benefit from doing so.
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Nareed
Nareed
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May 4th, 2010 at 7:20:37 AM permalink
Quote: boymimbo

When you book a hotel-airfare combination on an airline's website (Air Canada Vacations, Southwest Vacations), the casinos charge less than their book rate to the airline. Airlines in turn will mark up the hotel rate marginally to be somewhere between what the hotel charges them to book the room and the hotel's own posted rate... the hotel must have an agreement with the carrier for the airline to pull this off.



Sure. But hotels do that with travel agents and tour operators and even with large groups. It's wholesale pricing. Besides, hotels do this in every popular destination, be it for business or pleasure. You'll find such deals for trips to NYC, Cancun, Orlando, etc.


Quote: boymimbo

Casinos would have no reason to subsidize the airlines coming to Vegas unless it was receiving a direct benefit from doing so.



Certainly. In this case airlines fly to Vegas because lots of people wnat to fly there. Same as why they fly to LA. Perhaps a few more people would fly in if the fligths were, say, 10% cheaper overall, but I doubt the additional numbers would justify the expense for the casinos.
Donald Trump is a fucking criminal
pacomartin
pacomartin
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May 4th, 2010 at 8:09:19 AM permalink
Half the domestic flights are on Southwest, Allegiant, and Jet Blue.

Basically, the legacy carriers only fly to Vegas to provide connections to their hubs. In some very rare cases there is no competition with Southwest, and they fly more than 3 planes per day to these hubs.

You have a few areas where Southwest doesn't fly to:
Dallas-Ft-Worth ( which will change once Southwest can fly from Love field non-stop to Las Vegas)
Houston Intercontinental (Southwest flies to Houston Hobby)
Newark International (Southwest doesn't fly to New Jersey)
Atlanta (Southwest doesn't fly to Georgia)

United, is McCarran's No. 2 air carrier and they have five hubs. Daily they fly
6-7 flights to Denver,
6-7 flights to Chicago's O'Hare,
4 flights to San Francisco,
3-4 flights to LAX and
3 flights to Dulles in Washington D.C.



I think flight costs are low because the Southwest keeps them low, and it is Southwest's biggest airport.
thegov2k2
thegov2k2
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May 4th, 2010 at 8:59:07 AM permalink
Newark Liberty is as much a NYC airport as it is a New Jersey airport. It's actually closer to Manhattan than either JFK or La Guardia. Southwest does serve LGA, though they cannot fly non-stop to Las Vegas. Additionally, Southwest does serve Philadelphia, and that's as close (if not closer) to a good portion of New Jersey as Newark Liberty.
pacomartin
pacomartin
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May 4th, 2010 at 12:36:40 PM permalink
I suppose what I was trying to say that despite Las Vegas airport being the 7th largest in the USA, and 17th largest in the world it has a fairly simple structure. The legacy airlines don't really compete with each other, they simply fly to their hubs. Generally they have some percentage of people switch to international flights at their hubs. No US carrier flies internationally from Las Vegas. Mergers have little effect since there is no overlap.

Southwest dominates the airport. The legacy carriers only have a real shot domestically if they are not competing directly with Southwest.

The foreign carriers have good service to Canada, and reasonable service to Mexico. The UK seems to be a growing market. Nonstops to Asia consist of twice a week to Seoul and to Manila Philippines via Vancouver.
There are no non-stops to China, Japan, Taiwan, France or Germany.

Similar size airports in the USA: Houston, and San Francisco have huge numbers of international destinations.

Vegas has been bumped off the 20 largest International Gateways by Charlotte, NC. The American Southeast is expanding it's international traffic, while Vegas is not keeping pace.

2008 International Passengers
Gateway airport 2008
New York (JFK), NY 22,029
Los Angeles, CA 16,164
Miami, FL 15,999
Chicago (O Hare), IL 11,106
Newark, NJ 10,934
Atlanta, GA 9,232
San Francisco, CA 8,331
Houston (G. Bush), TX 7,673
Washington (Dulles), DC 6,011
Dallas-Ft. Worth, TX 4,938
Detroit, MI 3,800
Philadelphia, PA 3,724
Boston, MA 3,523
Honolulu, HI 3,414
Fort Lauderdale, FL 3,073
Seattle-Tacoma, WA 2,787
Orlando, FL 2,575
Guam Island, GU 2,564
Minneapolis-St. Paul, MN 2,560
Charlotte, NC 2,297
thegov2k2
thegov2k2
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May 4th, 2010 at 12:52:39 PM permalink
Well, you'd have to say that the reason US airlines don't fly non-stop from Las Vegas to international destinations is because there just isn't as much money to be made. Airlines flying internationally from the US make their money on selling business-class seats at list price. There just aren't enough people willing to buy those same seats flying to and from Las Vegas. This may sound counter-intuitive, but it's the answer.

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