The Las Vegas Monorail had its worst ridership month ever in January, sinking the troubled $650 million rapid transit line's bond rating further into "junk" status Friday.

Ridership slid to just 18,187 daily riders last month -- roughly half of what it was in July -- while Fitch Rating, a credit rating firm, dropped the monorail's rating to "BB," two notches into "junk" territory.

That poor showing imperils plans to extend the monorail to McCarran International Airport, which would rely on a multimillion-dollar bond sale to cover the cost.

Without a new bond sale, monorail officials say there's no other realistic way to pay for an extension. And with a "junk" rating, new bonds would be a tough sell.

"The short answer is, we have to have access to the bond market to finance our system. To access that market, we need to improve those ratings," Ingrid Reisman, a spokeswoman for the Las Vegas Monorail Co., said Friday.

"We need to continue to do what we're doing and continue to implement the plan we've put in place," Reisman said.

Previously, the monorail's worst ridership month was January 2005, when 22,313 people used the 4.4-mile system each day. The monorail's bond rating has been deemed "junk" since last March. In its report, Fitch Rating noted that revenues of the existing system -- which are used to pay off bonds that helped cover the original segment's construction cost -- are half what was promised when those bonds were first sold. Operating costs are 20 percent higher.

The monorail has been falling as much as $70,000 a day short of matching the roughly $159,000 needed daily to cover operating costs and debt service, while averaging fewer than 30,000 daily riders last year.

The system is believed to have lost around $20 million last year, which was covered by cash reserves.

Fitch said its downgrade "reflect(s) an increasingly constrained financial environment where significantly lower than anticipated fare revenue is not expected to be sufficient to pay debt service, even with the recent aggressive fare increase, requiring regular draws on internal liquidity to meet obligations."

The monorail increased its base one-way fare last month to $5, from $3.

Fitch Rating said it viewed the fare increase "positively" and added, "Given the strength of the Las Vegas Strip tourist and convention market served by the monorail, Fitch estimates the monorail retains some, albeit limited, flexibility to raise rates if demand continues to lag."

Curtis Myles, president and CEO of the monorail company, said Fitch's announcement was not surprising. "But we are taking steps to address their concerns," Myles said in a prepared statement.

"We started the year knowing we had a lot of work to get done over the next twelve months and beyond. We knew January and February were going to be our lowest volume months, and the fare increase would affect the number of riders even more," Myles's statement said.

Even with decreased ridership, revenue increased, Myles's statement said.

Indeed, the monorail brought in $82,510 in fare box revenues last month, compared to $65,466 in the same month last year. And that was with 4,126 fewer daily riders.

"This is a positive trend that will continue as we take the proactive steps planned this year," Myles's statement said.

Those steps include a quadrupling of the monorail's marketing budget and other increased efforts to sell tickets and make ticket distribution easier.

"We have a lot of initiatives we're working on this year," Reisman said. "We're very excited about this year."

Reisman argued that a drastic ridership increase won't be needed to break even, as long as riders are willing to pay the new, higher fare.

Bonds used to pay for the existing system are insured against default, protecting bondholders and the state, which issued the tax-free bonds on the behalf of the nonprofit monorail company.

But it would force the monorail to pay higher interest rates if it tried to raise more cash, and make its bonds less desirable to bond buyers.

Fitch did note the monorail isn't running out of cash anytime soon. It still has more than $90 million in reserves that "provide an important offset to lower than expected fare revenues and are available to pay debt service" for at least the next two years.

Late last year, monorail officials unveiled plans to study an airport rail link by 2009 or 2010, at a cost that could range from $100 million to $800 million paid for by bond sales, if a bond sale was doable.

If bond sales fizzle, Reisman said, "We have no plans to go to the public sector" for funding, she said.

Monorail officials hope to be running a profitable operation by year's end, which is hoped to result in an improved bond rating.

"They can reexamine it at any time, once there's significant data to change that rating," Reisman said.