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Who's Who in Low Cost Aviation
| Carrier: | Allegiant Air
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| Headquarters: | USA
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| Founded: | 1997
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| Destinations: | 53
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| Bases: | Las Vegas, Orlando Sanford, Tampa-St Petersburg (and soon to be Fort Lauderdale and Phoenix-Mesa)
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| Owners: | Private Investors; subsidiary of Allegiant Travel Company
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| Listed: | Yes
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| Online Booking: | Yes
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| Website: | http://www.allegiantair.com
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| Fleet | MD-80s 29
| Overview - Allegiant Air Allegiant: expanding but sticking to its niche
It could be said that no carrier so relentlessly pursues opportunities within its niche as Vegas-based Allegiant. Once a traditional-model carrier based out of Long Beach, California, Allegiant now limits itself to the niche of serving three of the United States most popular destinations for leisure traffic – Las Vegas, Orlando Sanford and Tampa-St Petersburgh.
Using its low prices and the appeal of holiday arm Allegiant Vacations, which has contracts with 34 hotel properties in Las Vegas and 21 in Central Florida, the carrier conducts viable services to leisure destinations from communities and airports that are unlikely to receive service from full-service carriers, or even most LCCs.
Because of the national appeal of its bases for the holiday-maker market, Allegiant is able to fill aircraft from cities that would not normally be able to support longer services with mainline jet equipment. The carrier uses this formula, plus its charter agreement with gaming corporation Harrahs Entertainment to generate reliable revenue.
Outlook potentially bright for focused LCC
Allegiant, led by one of ValuJets founders Maurice Gallagher, has a niche that few would dare take over, making it fundamentally shielded from competition, even with Southwest operating a large base at Las Vegas. However, with a low-margin operation, its older fuel inefficient fleet of 29 MD-80s (to be 40 by the end of 1Q08).
Allegiant Air has increasingly focused on growing its traffic, with the announcement of two new bases, and capacity increases which has pushed up the airlines passenger number. In 3Q07, Allegiant passenger numbers more than doubled year-on-year to slightly over 750,000 passengers. Traffic (RPMs) increased 45.6% year-on-year on a 35.2% capacity increase. The airline plans to continue this increase, with the arrival of 11 more MD-80s by 1H08, bringing the LCC’s fleet to 40.
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