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An Analysis Of National's Failure

Thu Nov 14, 2002 2:45 am

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.......
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.

RE: An Analysis Of National's Failure

Thu Nov 14, 2002 6:24 am

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.


RE: An Analysis Of National's Failure

Thu Nov 14, 2002 11:26 am

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.

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RE: An Analysis Of National's Failure

Thu Nov 14, 2002 11:29 am

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.

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RE: An Analysis Of National's Failure

Thu Nov 14, 2002 11:42 am

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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