ELKO - Red Lion Inn & Casino is suspending the long-time Casino Express program that flew gamblers into Elko as of Feb. 1 in a move that will impact Elko.
“I'm sure there will be an economic impact to Elko,” said George Schweitzer, who is the interim chief executive officer of McClaskey Holdings LLC, which owns the Red Lion.
“They bring in 40,000 people a year to Elko. It's very sad,” said Lisa Dunn, chief executive officer of Xtra Airways, which flies the charter planes for the Casino Express program.
Red Lion expects there to be layoffs when the flights end, but Schweitzer said numbers aren't available as yet.
“I met with employees today and let them know at this time what we're doing and that it ultimately will result in layoffs. The good news is that the job market is fairly strong,” he said.
McClaskey properties employ close to 700 when the High Desert Inn, Holiday Inn Express, Gold Country Inn and Thunderbird Motel are included.
Schweitzer also announced he has hired former Red Lion manager David Zornes as chief executive officer of McClaskey Holdings.
“I'm very excited about that,” Schweitzer said. “We will work with Zornes on a plan to overcome the current challenges, to build and revitalize the business.”
Xtra Airways, which recently changed its name from Casino Express Airlines, also will feel the impact.
Dunn said Thursday 15 to 20 employees face layoffs, and the airline has delayed taking delivery on one of the Boeing 737-400 jetliners it planned to operate until November of next year.
She also said when Casino Express flights stop, the airline won't be landing jets at Elko Regional Airport on a regular basis, which will impact the airport.
“Unless the Red Lion gets the program going again, we will not have any flights into Elko,” Dunn said, adding that the airport will lose out on landing fees and passenger facility charges.
“I think it will be back after Red Lion reorganizes and they get Dave Zornes back,” Elko Councilman Glen Guttry said this morning.
He said, however, the flight suspension “is going to make a dent in the city's budget” for operating the airport, with the loss of fees.
Guttry said the city already was feeling the impact with the reduced passenger loads on Casino Express flights.
Red Lion has been flying gamblers into Elko since 1986.
Red Lion and the airline worked out an agreement to let Red Lion out of its contract early, she said.
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“Our hope is to build a modified charter program with them. We hope we will be able to work out arrangements,” Schweitzer said, adding that the airline will keep its headquarters in Elko and “ultimately, it will be fine.”
Red Lion decided to call a halt to the flights because “costs were to the point where we were not making enough from passengers to pay for the flights under the current program,” he said.
“We need to step back and re-evaluate,” Schweitzer said.
Red Lion was dealing with lower passenger numbers, higher fuel costs and stiffer gaming competition, he said.
The announcement Thursday also stated that the Red Lion would continue plans to market Elko as an outdoor adventure and gaming destination.
“There is so much that Elko offers. The problem is our marketing effort cannot ramp up fast enough to drive the business required for the flight program,” Schweitzer said. “Passenger loads are way down.”
Elko Area Chamber of Commerce Chief Executive Officer Neil McQueary said today the news about Casino Express is “unfortunate, but I'm confident McClaskey Properties will be able to regroup, and I'm happy they suspended, not canceled, flights. Hopefully, they will bring them back in some form.”
Schweitzer said Zornes will start work next week, and he will live in Elko. Schweitzer has been commuting from out of state since former CEO Annette Kerr resigned.
This will be the third time Zornes has been in Elko, according to a 1992 Elko Daily Free Press article.
He was general manager of the Red Lion from 1990 to 1992, and he was general manager from 1983 to 1988.
He has been managing casinos in Colorado, and has more than 25 years of gaming and management experience.
Red Lion has considered dropping Casino Express flights in the past, but never did so. According to a Nov. 3, 1997, article, which stated the Red Lion would re-evaluate whether to continue the flights in light of increased riverboat gambling and more casinos on Indian reservations.
Although Xtra Airways won't be flying into Elko after Feb. 1, the airline will continue its daily charter flights to West Wendover for the Peppermill properties, Dunn said.
The airline will have three 737-400s flying in other parts of the country, as well as its 737-800. Planes will be based in Boston, Louisville, Ky., and Cincinnati, she said.
“We want to remain the hometown airline. Our headquarters will remain in Elko permanently, and we hope for seven aircraft by November 2006,” Dunn said.
Jobs will be added when the airline increases the number of planes, she said, and there may be opportunities for the employees who face layoffs Feb. 1.
Red Lion will be working with the state's Job Connect and Job Opportunities in Nevada to offer job fairs and training, Schweitzer said.
Elko County Commission Chairman Charlie Myers, who manages Job Opportunities in Nevada in Elko, said JOIN will be able to provide training for laid-off workers.
He also said he was excited Zornes was coming back.