Allegiant Air (NASDAQ: ALGT) is an American low-cost
airline owned by Allegiant Travel Co.
headquartered in Enterprise, Nevada, United States.
The airline operates scheduled and charter flights from focus cities at Las Vegas' McCarran International Airport, Orlando Sanford International Airport, St. Petersburg-Clearwater International Airport, Phoenix-Mesa Gateway Airport, Fort Lauderdale-Hollywood International Airport, and Bellingham International Airport. The airline also offers vacation packages through its Allegiant Vacations affiliate. Allegiant Travel Co. is a public company with 980 employees and 700 millon USD market capitalization.
ALLEGIANT AIR ROUTE MAP AS OF NOV 8TH 2010
Allegiant Air was founded in 1997 under the name WestJet Express. After a trademark dispute with West Jet Air Center of Rapid City, South Dakota, and with the name's similarity to WestJet Airlines of Calgary, Alberta, the airline adopted the name Allegiant Air and received its operating certificate for scheduled and charter domestic operations in 1998. The airline also has authority for charter service to Canada and Mexico. Wholly owned by Allegiant Travel, the airline now has over 1,300 employees.
Scheduled service began on October 15, 1999, between Las Vegas and the airline's initial hub in Fresno, California, with Douglas DC-9-21 and DC-9-51 aircraft. Shortly after the shutdown of WinAir Airlines, Allegiant Air opened a hub in Long Beach, California, mirroring WinAir's network. The airline was unable to bring in enough revenue to cover its costs and filed for Chapter 11 bankruptcy protection on December 13, 2000.
In June 2001, Maurice J. Gallagher, Jr. joined the airline and soon became its President and Chief Executive Officer. Having formerly worked with WestAir and ValuJet Airlines, Gallagher led the airline's transformation into its present form, moving the base to Las Vegas and focusing on smaller markets that larger airlines did not serve with mainline aircraft. From 2001, they have grown from 2 destinations to over 50 from Las Vegas, Orlando/Sanford, Florida, and St Petersburg, Florida.
On November 20, 2006, Allegiant Air announced that it had filed a registration statement with the Securities and Exchange Commission in anticipation of a planned initial public offering of its Common Stock. It is listed on the NASDAQ Stock Market under the ticker symbol "ALGT".
On July 31, 2007, the airline announced plans to open a fourth focus city and operations base at Phoenix-Mesa Gateway Airport in Mesa, Arizona, connecting the Phoenix metropolitan area to 13 destinations already served by Allegiant and one new destination. The airline began service out of their new focus city on October 25, 2007. The airport announced a 10,000 square foot expansion in August 2008 which will increase the number of gates from two to four and allow Allegiant to triple the number of flights from Phoenix. The expansion will be funded by a loan from Allegiant which will be repaid by passenger fees.
On August 1, 2007, Allegiant also announced plans to open their fifth focus city and make an operations base at Fort Lauderdale-Hollywood International Airport, connecting the South Florida area to destinations already served by Allegiant. The airline began service in this focus city November 14, 2007.
On January 29, 2008, Allegiant opened their sixth base at Washington's Bellingham International Airport on March 1, 2008. The airline is basing two McDonnell Douglas MD-80 aircraft in Bellingham as part of the expansion. Routes served exclusively from Bellingham include Las Vegas, Reno, Palm Springs, San Diego, San Franciso, and Phoenix. Expansion in Bellingham has been largely driven by its proximity to Vancouver, Canada.
Along with Southwest Airlines, the airline was the only major United States airline to make a profit in the first quarter of the oil-driven economic crisis of 2008.
On September 16, 2008, the airline announced the addition of Lexington, Blue Grass Airport for non-stop service to Orlando-Sanford and Tampa-St. Petersburg commencing November 2008. The next day, Allegiant announced the addition of Hagerstown Regional Airport for non-stop service to Orlando-Sanford commencing November 14, 2008.
Allegiant Air operates a business model that focuses on:
-Flights to airports which have limited or no service from mainline carriers
-Attracting leisure passengers traveling to seasonal warm-weather destinations
-Generating ancillary revenues in addition to ticket revenue
-Maintaining low operational costs
Allegiant Air targets small cities with limited passenger airline service. Many of the airline's markets, such as Peoria, Illinois, and Allentown, Pennsylvania, are served only by commuter service requiring a connection at an airline hub. Allegiant, in its March 2008 SEC filing, asserted that in 95 of its 103 markets, the airline was the only carrier offering nonstop flights to its leisure destinations.
Other Allegiant destinations are secondary airports that are close to large metropolitan areas. For instance, Allegiant is the only carrier operating at Phoenix-Mesa Gateway Airport, MidAmerica St. Louis Airport, and Hagerstown Regional Airport in Maryland.
The airline's focus is on leisure travelers, particularly those in colder northern climates, going to warm-weather tourist destinations such as Las Vegas, Orlando, or Phoenix. The airline offers a lower frequency of flights and no amenities such as frequent flier points or on-board entertainment. As a result, Allegiant carries few business passengers.
The airline, which attracted investment from the Ryan family of Ireland, owners of Ryanair, follows a similar model which seeks ancillary revenue in addition to ticket revenue. Allegiant earns ancillary revenue through sales of food, beverages, and souvenirs on board. The airline also offers hotels, cars, show tickets, and tour packages on its website, which generates commissions. As of May 2008, Business Week reported that ancillary revenues were nearly $26 per passenger.
The airline tends to offer lower fares, which requires strict cost control. Part of the airline's lower cost structure includes operation of MD-80 jets. While the aircraft are less fuel-efficient than newer planes, Allegiant is able to purchase them outright for as little as one-tenth the cost of a new Boeing 737. Given the low cost of ownership, Allegiant is able to fly the planes less (seven hours per day versus 13 hours per day at JetBlue), which helps keep labor costs lower.
The airline does not accept subsidies from cities seeking service, but still seeks to maintain a low permanent operating cost at the airport. Allegiant rents ticket counters on an hourly basis and in Chattanooga, Tennessee, and Springfield, Missouri, many duties are handled by airport employees contracted to Allegiant.
The cost of ticket sales is reduced by selling tickets on its website and at airport ticket counters. The toll-free number was eliminated and Allegiant does not utilize internet travel agencies.
Criticism of the business model
Some airport officials have criticized Allegiant for shutting down routes or leaving markets quickly if they are not immediately profitable. In Kinston, North Carolina, the airport authority invested $60,000 for advertising Allegiant's routes and asserted that the load factor was 90% or better. However, they contend that the airline left the market when it did not earn enough ancillary revenue after only one year. In Columbia, South Carolina, the carrier departed after only two months as loads began to weaken from new legacy airline competition.
The airport director in Worcester, Massachusetts, felt that Allegiant reneged on a commitment to serve the airport for five years given the use of federal grants to assist its startup. However, the airline replied that the market was immediately unprofitable and starting service there was a poor decision.
Allegiant Vacations functions as an in-house package vacation vendor. The company has arrangements with 34 hotel properties in Las Vegas and 21 in the Orlando, and Daytona Beach, Florida, areas. The vacations division also has partnerships with several rental car agencies and show-ticket vendors.
At least for some routes, air travel must be purchased along with hotel accommodations--a two-night minimum stay in the case of Champaign, IL, to Las Vegas, NV, for example.
Main article: Allegiant Air destinations
Allegiant Air currently flies to 67 destinations throughout the United States. Upcoming schedule changes will increase Allegiant's destination count to 69 when the airline begins service to Hagerstown, Maryland, on November 14, and Elmira, New York, on November 20, 2008. All bookings begin or end at one of the six focus cities/operational bases; therefore, travel reservations between any of the other cities must be reserved through separate bookings and checked luggage claimed and re-checked in one of the six focus cities.
Nonstop service between Lexington, KY, (LEX) and St. Petersburg/Clearwater, FL, (PIE) begins November 7, 2008.
Nonstop service between Hagerstown, MD, (HGR) and Orlando-Sanford, FL, (SFB) begins November 14, 2008.
Nonstop service between Appleton, WI, (ATW) and Orlando-Sanford, FL, (SFB) begins November 19, 2008.
Nonstop service between Elmira, NY, (ELM) and Orlando-Sanford, FL, (SFB) begins November 20, 2008.
Nonstop service between Chattanooga, TN, (CHA) and Fort Lauderdale, FL, (FLL) begins November 20, 2008
Nonstop service between Huntington, WV, (HTS) and Fort Lauderdale, FL, (FLL) begins November 20, 2008
Nonstop service between Blountville/Tri-Cities, TN, (TRI) and St. Petersburg/Clearwater, FL, (PIE) begins November 20, 2008.
Nonstop service between Wilmington, NC, (ILM) and St. Petersburg/Clearwater, FL, (PIE) begins November 20, 2008.
Nonstop service between Blountville/Tri-Cities, TN, (TRI) and Fort Lauderdale, FL, (FLL) begins November 21, 2008
Nonstop service between Fargo, ND, (FAR) and Orlando-Sanford, FL, (SFB) begins November 21, 2008.
Nonstop service between Cedar Rapids, IA, (CID) and St. Petersburg/Clearwater, FL, (PIE) begins November 21, 2008.
Nonstop service between Oakland, CA, (OAK) and Bellingham, WA, (BLI) begins February 2, 2009.
Allegiant Air is actively pursuing the opportunity to serve Paine Field (PAE) in Everett, WA, (25 miles north of Seattle), and filed a complaint with the FAA at the county's opposition.
Allegiant currently flies to 71 destinations throughout the United States. With a few exceptions, all bookings begin or end at one of the nine focus cities/operational bases; therefore, travel reservations between any of the other cities must be reserved through separate bookings and checked luggage claimed and re-checked in one of the nine focus cities.
The airline may provide new service from Pangborn Memorial Airport (EAT) in Wenatchee, Washington, according to the airport manager. Allegiant Air is actively pursuing the opportunity to serve Paine Field (PAE) in Everett, Washington, (25 mi (40 km) north of Seattle). The company has filed a complaint with the FAA at the county's opposition to the plan. Additionally, Allegiant Air is also very interested in serving Salem, Oregon -- conversations are continuing.
On February 1, 2010, Allegiant began operations at Orlando International Airport (MCO). The Company moved one half of it's Orlando schedule to Orlando International Airport in order to test revenue streams at the higher cost airport. After evaluating the routes out of Orlando International, the carrier decided to consolidate and return their Orlando area operations at the original Orlando Sanford International Airport base citing an inability to achieve a fare premium at MCO as anticipated, a strong passenger preference for Orlando Sanford International Airport, higher costs at MCO than expected and a more efficient operating environment at SFB.
AWARDS BY ALLEGIANT AIR.......
Federal Aviation Administration's (FAA) Aviation Maintenance Technician (AMT) Diamond Award of Excellence. August 2010
Fortune 100 Fastest Growing Companies: Entered list at 25
Aviation Week: Top Performing Low Cost Carrier
Federal Aviation Administration's (FAA) Aviation Maintenance Technician (AMT) Diamond Award of Excellence. 2009