The analysis released Tuesday by Fitch Ratings, a New York City-based credit rating firm, also plunged the monorail's bond rating further into "junk" status and predicted the monorail won't be able to pay its debts by 2010.

However, Las Vegas Monorail Co. executives dismissed concern that the monorail and their proposed $500 million extension to McCarran International Airport were in jeopardy.

"The new Fitch rating will have no effect on the day-to-day operation of the Las Vegas Monorail or its expansion plans," Ingrid Reisman, vice president of the Las Vegas Monorail Co., said in a prepared statement.

Last year, a Fitch analyst said the monorail's bond rating would make it difficult for the rail line to gain financing for the McCarran extension.

In downgrading the privately run $650 million monorail to "CC" status from "CCC," Fitch cited competition for riders who take Las Vegas Strip buses and taxis.

The 3.9-mile system began running in July 2004 on an elevated Z-shaped track east of the Strip, linking several resort hotels and the Las Vegas Convention Center.

It has been using cash reserves added to the budget when project administrators floated state-backed tax-exempt bonds before breaking ground in 2001. No government entity is obligated to take over the monorail or its debt. AMBAC Assurance Corp. of New York insures the bonds, and a contingency fund exists to tear down the line if it fails.

Fitch estimated that the monorail now has approximately $69 million in reserve, down from $89 million last year. The rating company said it expected reserves "to only last, at best, three years," to 2010.

Fitch cited "continued declines in monthly revenues" in the first half of 2007, caused by a combination of ridership losses and fare discounts. The discounts follow an increase in the base adult one-way fare to $5 from $3 in 2006 that Fitch blamed for an approximately 30 percent decrease in ridership.

When it began service in 2004, the monorail projected more than 50,000 riders a day.

June's average daily ridership of 23,790 passengers was the highest since 2005, but rider volume in the first five months of 2007 was down by almost 3 percent from the same period in 2006.

In her statement, Reisman touted the monorail as a necessary part of the Las Vegas area transportation network.

"The fact that the privately funded Las Vegas monorail has transported more than 24 million visitors along the resort corridor ... indicates that it is and will continue to be a part of the long-term transportation solution," she said.

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