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An Analysis Of National's Failure  
User currently offline727LOVER From United States of America, joined Oct 2001, 7457 posts, RR: 20
Posted (13 years 6 months 2 weeks 6 days 21 hours ago) and read 1568 times:

Eeerrrr........well I don't have one. Big grin I was hoping someone else could provide one!! But I do have an observation! I don't understand their business plan, you already had 2 entrenched airlines in that market, low-cost airlines at that!

OK, your turn.......

I feel woozy....what did you put in that Pudding Pop?
4 replies: All unread, jump to last
User currently offlineCerulean From , joined Dec 1969, posts, RR:
Reply 1, posted (13 years 6 months 2 weeks 6 days 17 hours ago) and read 1501 times:

I don't think it was a single thing that caused the collapse of N7. But rather, a combination of factors all came together at the right time.

First was their fleet. IMO, the choice of being a low fare airline AND flying a large aircraft type such as the 757 was a tactical error. I don't have the numbers here, but I would think that their break even load factor had to have been pretty high. Especially with all of the short flights to LAX and SFO. IMO, they should've gone with 737-300s or -700/-800's, or even A320's. They are smaller yet still have transcon ability. They wouldn't have needed as many pax.

Also, even though their planes were of the same type, they came from all over the place and I don't think that more than two of their planes had thesame configuration.

Second, as you noted, they started up in a market that was already saturated (although to be fair, most of HP's service is/was flights that flew with equipment that would've otherwise been parked-between 2100-0300 hours). Their choice of Las Vegas as a hub for a "national" airline looked good on paper. But with all of the low fares already going in there and the charter traffic, that end of the market was alreday full. All of the full service Majors were aledy running diluted yields in and out of there. Why would Mr Conway have thought we needed another? Indeed, there are alrday nonstop lowfare flights from Vegas to just about every major city in the country.

Third, was their marketing. They never seemed to have much direction or vision. Indeed few people I asked had ever even heard of them. On one hand, they touted themselves as "the low fare Las Vegas' Hometown Airline". Other times, I got the impression that they were just "there", and nothing was all that special about them. Fourth was September 11, 2001. 'Nuff said.

Fourth, which sort of summarizes all of the above: poor and sloppy management.

User currently offlineTwaneedsnohelp From , joined Dec 1969, posts, RR:
Reply 2, posted (13 years 6 months 2 weeks 6 days 12 hours ago) and read 1437 times:

National was put out of business by a vicious America West price war. Combine that with the shitty economy and it becomes clear.

It wasn't the fleet or the marketting or anything like that. HP simply chopped their revenue in half and 9/11 doubled their expenses.


User currently offlineClickhappy From United States of America, joined Sep 2001, 9823 posts, RR: 64
Reply 3, posted (13 years 6 months 2 weeks 6 days 12 hours ago) and read 1432 times:
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N7 was in the toilet pre-dot com, economy crash.

TWA and National both were making losses when the economy was in full tilt boggie mode.

Check your facts.

User currently offlineGARUDAROD From United States of America, joined Apr 2000, 1566 posts, RR: 1
Reply 4, posted (13 years 6 months 2 weeks 6 days 12 hours ago) and read 1420 times:

NATIONAL was originally funded by Harrahs and the Mirage resorts
to bring in tourists from under served markets to LAS. The plan was
then that passengers would link up with those hotels. Over time,
Mirage pulled out and Harrahs was less than satisfied with the overall
results. As mentioned above, the spares were horrendous. They had
to have 10 different spares because their fleet was so diverse, even
though they were all B757s. Couple that with a low yield base market
already covered by two low cost airlines, a foundering economy, post
911 pitfalls, it spelled a recipe for financial disaster. When the company
was founded, they touted how they were the highest financed start up,
at that time, but $100million doesnt go that far when you are bleeding

Cargo doesn't whine, moan, or complain
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