If I went up to 100 people in the US asked them about Allegiant Air, my guess is almost all of them would pose the question asked in the title of this post. I've mentioned some of their seemingly random route announcements before, and you've probably asked the same question. So, who the f*** IS Allegiant Air?
On the surface, these guys seem like a train wreck. They fly a couple times a week bringing small town folk to places like Las Vegas and Orlando using gas-guzzling MD-80 aircraft. That does not sound like a recipe for success, but believe it or not, these guys are on to something. In fact, even the New York Times
(username required) is paying attention these days.
The airline now has 21 planes radiating from its three operational bases in Las Vegas, Orlando/Sanford, and the newest one in St Petersburg/Clearwater. This is a route map only a mother could love.
You might wonder how an airline could fly to all those cities with only 21 planes. Well, it's because they fly to most of them only 2 to 4 days a week. Most airlines wouldn't dare fly a schedule like that because it doesn't help you attract the business traveler, but Allegiant isn't looking for the business traveler.
Start with their hubs. Vegas, Orlando, and Tampa are all big leisure destinations, so there should be decent traffic from just about anywhere in the country if you fly it twice a week. Think about it from the perspective of a local. If I live in Topeka, Kansas, I can fly to Vegas on Monday or Friday. Well, going out Friday night and coming back Monday afternoon is the perfect gambling weekend. And what are my alternatives?
Well, you have no choices locally - nobody else even flies to Topeka. So you can drive 75 miles to Kansas City and fly out or you can fly Allegiant. Plenty of people are willing to drive 75 miles though, so the key is also making sure you have low fares. Allegiant has extremely competitive low fares and that combined with convenience make them hard to beat in these smaller markets.
The obvious caveat to having low fares is making sure your costs are lower than that. Allegiant has done an excellent job of keeping costs down. While those MD80s burn a lot of fuel, they are downright cheap to acquire on the used market. And who do you think will charge more for landing fees - Topeka or Kansas City? There are some serious cost advantages to flying from these smaller airports. According to the NYT, they also keep crew costs down by having out-and-back routings so that they don't have to pay for crew hotels or meals on the road. Crew wages are also lower. A 10 year captain will make $105 an hour whereas a 10 year captain for American makes $154 per hour on the same plane.
In addition, they've embraced the Ryanair model and have boosted ancillary revenues onboard. Want an assigned seat? That'll cost you. How about a drink onboard? Fork over the cash. Oh and by the way, if you need a hotel or car rental at your destination, Allegiant will be happy to help and take a commission from the sale.
These guys are doing things right and they're making it work profitably. If you live in a small town, they either fly there already or they're thinking about it.