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National seeks new loan deal

Nov 5, 2002 7:09 AM

   Harrah’s isn’t pulling the plug on National Airlines . . . yet.

   The casino company extended its $12.5 million letter of credit to the struggling carrier last week, but also made clear that no new equity would be invested.

    “We care a great deal about National. It’s absolutely critical to Las Vegas tourism,’’ said Harrah’s spokesman David Strow.

   But Strow also noted that only 10 percent of National’s passengers actually stay at Harrah’s properties.

   “It’s time for someone else to step up,’’ he said.

   Unfortunately for National, a key aircraft lessor stepped down last week, announcing it would not provide an expected $2 million letter of credit. That forces the Las Vegas-based airline to renegotiate the $112 million bankruptcy package that had been wrapped up last month.

   National heads back to bankruptcy court on Nov. 15, and no one’s taking bets on the outcome this time. Rumors of a closure continue to swirl and company spokesman Dik Shimizu fanned concerns when he stated, “If we don’t successfully negotiate a deal then we would have to shut down.’’ Though he added that a shutdown is not imminent, it was the company’s grimmest assessment yet.

   Ironically, Las Vegas’ third largest carrier is bucking industry trends, posting an 11 percent gain in passenger count in September while competitors showed flat or declining traffic.