Flying Aces.

Navigation: Main page

Author: Lacter, Mark

Section: OutFront

COMPANIES

FLYING ACES

Having overseen the rise and fall of one airline, Michael Conway is flying high again with his upstart National Airlines. Will the second time be the charm?

THERE WAS NO LOVE LOST BETWEEN Michael Conway and America West Airlines when Conway was ousted in 1993 from the airline he cofounded. The final indignity came when America West revoked Conway's lifetime pass on the airline he'd mortgaged his house to start.

Now he's getting even. Conway's Las Vegas-based National Airlines turned a profit after barely a year in business, a rare feat in the industry. But that does not mean Conway still can't hold a grudge. "I always assumed that if you do your job, especially if you achieve what never has been achieved before, that would be fine," says Conway, referring to his success at turning around America West after its 1991 bankruptcy. "But that's not the way it works."

Despite National's quick takeoff, Conway sees America West conspiracies at every turn. He fumes over new slot assignments out of Washington, D.C.'s Reagan National Airport that left National with only one nonstop flight a day between Washington and Las Vegas. America West won three round-trips--two to Phoenix and one to Las Vegas.

"What it allows is for America West to gouge the Phoenix-to-D.C. market and then subsidize the low fares they have to Las Vegas," growls Conway. Indeed, America West's Phoenix-to-Washington round-trip fare is $919, while the Las Vegas-Washington fare that same day is $209 (compared with $219 on National). The suspicion around National is that Arizona's politicians lent America West a helping hand.

"We are as competitive as any airline in the industry," snaps America West flack C.A. Howlett, saying such fare comparisons provide a distorted view.

Despite his obsession with his former company, National's quick success proves that someone can still start an airline from scratch and not go bust. After producing an operating loss of $50 million in its first 11 months, National posted an operating profit of $2.4 million in the second quarter ended June 30, on revenues that soared from $3.1 million the same quarter a year earlier to $64 million.

Conway correctly calculated that the big airlines wouldn't add enough flights to keep up with all the low rollers pouring into Las Vegas. But he was wrong in thinking the Vegas casinos would ante up for his gamble. It didn't help that Conway was operating out of Phoenix. "Nobody believed us," Conway says. "We were viewed as outsiders looking in, which is really tough because this town has a history of critics trying to tell them how to run their business." So on a wing and a prayer, Conway moved his ragtag army of executives to Nevada, still lacking funds.

It took three years, but Conway finally convinced Harrah's Entertainment and the Rio Hotel & Casino to each invest $15 million toward his initial $50 million startup fund. The partnership forged creative cross promotions, including a National check-in counter in Harrah's Strip casino and the use of Harrah's customer tracking database to promote National's ticket sales.

Conway is now wrapping up a second round of financing for $35 million and hints at going public. His fleet of 15 Boeing 757s already flies between Vegas and 8 airports, with plans for 15 more by 2005, including Chicago's O'Hare, beginning in January.

But Conway still has to navigate the turbulence that hurts all airlines: overcrowded runways and soaring fuel prices. "It's like OPEC got together on our inaugural flight and said how could we stick it to Mike and his friends," grouses Conway. By September fuel costs were double what they were when he started flying last year. "It's a good thing we love this business," Conway smiles.

Revenge is sweet.

PHOTO (COLOR): Gambling man: Conway's National is beating the odds.

Some items on this website are used by permission granted
in the Fair Use guidelines of the 1976 U.S. Copyright Act.
info [at] singlearticles.com
Powered by CommonSense

Going, going, gong.
The article reports on the financial scandal surrounding the funding of the British Labour Party. Ja...

Bumper Cars.
Reports on the Sylvania 300, the first race of the 2005 NASCAR playoffs. Comments regarding the race...

Is 16 too young to drive a car?
All signs point toward a rise in the driving age to 18