LAS VEGAS, Nov. 7 (UPI) -- Passengers holding National Airlines tickets did not have to worry about being stranded in Las Vegas on Thursday, since other airlines honored tickets issued by the carrier, which halted its operations overnight due to continued financial difficulties.
National, which failed to secure a $50.5 million loan from the federal government last summer, grounded its planes late Wednesday and broke the bad news to its 1,500 employees that it had gone bust.
"We were very close to completing a successful reorganization on a few different occasions, only to have additional obstacles confront us at the last minute," National President Michael Conway said in a statement. "We were able to meet all these challenges successfully, until now.
"I truly hope that other carriers pick up the service vacuum and still maintain the low-fare competition that National brought into every city we served," he added.
An unknown number of Las Vegas visitors were without a ride on Wednesday night. But by Thursday several other airlines had stepped up and offered to honor National tickets, although the ticket holders generally would have to fly stand-by unless they wanted to pay the difference for a full-priced fare.
"America West has proudly served the Las Vegas community for nearly 20 years, and we will do everything we can to accommodate those customers inconvenienced by the cessation of National Airlines," said J. Scott Kirby, executive vice president of America West Airlines.
The news of the immediate shutdown caught both employees and passengers by surprise. Many employees left McCarran Airport hurriedly, leaving passengers, many of whom had checked in for their flights, milling around the terminal trying to find seats on other airlines, or at least retrieve their suitcases from the National baggage area.
"People are traveling here expecting to get on a flight, and for them to actually be told, 'Sorry all the flights are cancelled' is ridiculous," one California-bound passenger told Las Vegas television station KVBC. "Guess I'm going to grab my bags and look for the next flight to San Francisco."
Officials at McCarran told reporters on Thursday that it was expected that most National passengers would be able to find an outbound flight on other carriers before the weekend rush.
National began operations in 1999 and was beset by financial problems almost from the beginning. Although it operated 35 daily flights between Las Vegas and 11 other U.S. cities, the airline had been in Chapter 11 bankruptcy since late 2000.
It was unable to rearrange its finances to the satisfaction of both its board of directors and its major creditors.
National's niche was to provide low-cost flights for tourists and gamblers traveling in and out of Las Vegas, and it became the fourth-largest carrier in the casino capital by passenger volume.
A major drop in overall air travel after the Sept. 11 terrorist attacks, coupled with a subsequent rise in fuel costs, dealt a blow that sent National and many other airlines reeling.
Conway expressed bitter disappointment with the perceived lack of help that National received from the federal government's Air Transportation Stabilization Board following Sept. 11.
National applied for a $50.5 million loan from the board, but its application was denied on Aug. 14 when the board concluded there weren't enough assurances the loan could be repaid.
"As much as I applaud Congress for their swift action in stabilizing the airline industry in September 2001, I am totally dismayed by the way the ATSB has handled the loan guarantee program," Conway said.
"The ATSB is choosing winners and losers in the industry, notwithstanding direction from Congress to the contrary."
(Reported by Hil Anderson in Los Angeles.)