11/08/2002 1:00AM

National Airlines loses gamble


What was advertised as Las Vegas's "hometown airline" no longer has a home. Or, does the gaming capital of the world no longer have a hometown airline?

Whatever the case, on Wednesday Las Vegas-based National Airlines abruptly ceased operations, shutting down the city's fourth-largest carrier (by number of passengers). Flight 354 at 4:20 p.m. at McCarran International Airport was the airline's last, and passengers with tickets for later flights were left stranded and upset.

The book was closed on the turbulent 41-month run of the bankrupt airline company, putting 1,500 employees out of work with no severance pay. Other airlines serving Las Vegas were making arrangements to help ticketed National passengers get to where they were going.

The airline's final attempt to stay afloat, a $112 million financing package, fell apart, and that signaled the death knell for National. In a statement, National Airlines chairman and chief executive officer Michael Conway said, "We exhausted every possible viable alternative in seeking funding to maintain our ability to fly . . . and were forced to make the very difficult decision to cease operations."

Through September, National had carried 1.85 million passengers through McCarran in 2002 and operated an average of 35 daily flights between Las Vegas and 11 other U.S. airports.

Created as a Las Vegas-based airline to serve cities throughout the nation, National was begun with startup financing by Harrah's Entertainment and the Rio hotel casino in April 1998. On May 27, 1999, National inaugurated service from Las Vegas to Los Angeles and Chicago.

But, the business plan of the fledgling airline could not overcome two unpredictable occurrences: an unprecedented increase of jet fuel costs in the summer of 2000 and the Sept. 11, 2001, terrorist attacks.

On Dec. 6, 2000, the airline filed for bankruptcy protection. On Jan. 21, 2001, billionaire Carl Icahn withdrew a $181.5 million bid to buy the company. On May 9 of this year, National formally filed an application with the Air Transportation Safety Board for a $50.5 million federally backed loan guarantee and was denied that request on Aug. 14.

National owes $7 million to McCarran Airport in overdue landing fees and other expenses, but Clark County aviation director Randy Walker said he did not believe the company would be able to pay.

National was responsible for 7 to 10 percent of the airline service to the city, and the impact of its closure was still being assessed by industry leaders.

Harrah's spokesman Gary Thompson said, "They were one of the largest low-fare carriers serving this market, and we're truly sorry to see this turn of events."

He believes that the remaining airlines will fill the void left by National.

Alan Feldman, spokesman for MGM Mirage, believes the same. He said, "The other airlines will pick up the traffic, and it's unfortunate for locals. [National] offered some great fares and kept the other airlines on their toes as far as fares go."

Rob Powers, spokesman for the Las Vegas Convention Authority, said, "Given the demand for Las Vegas as a tourist destination, other carriers will pick up the slack."

Ralph Siraco is turf editor for the Las Vegas Sun and host of the Race Day Las Vegas radio show.