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Profitable Allegiant Air picky about routes

Thursday, May 1, 2008
(Updated Friday, June 6 - 3:08 pm)


You'll see more kids in Mickey Mouse T-shirts than harried executives on Allegiant Air because the discount airline has carefully picked its routes to appeal to vacation travelers.

Do you fly Allegiant? Why successful? Join the discussion at the Debatables blog.

But Allegiant is all business when it comes to choosing routes with a sharp eye toward profitability. This week, it further proved that point by being one of the rare airlines declaring a profit in a dramatically hostile market.

And after Piedmont Triad International Airport's recent disappointment with the demise of Skybus Airlines, Allegiant remains one bright spot even if its growth plans aren't as ambitious.

Allegiant flies to three Florida cities from PTI — St. Petersburg, Fort Lauderdale and Orlando.

Its flights from PTI operate only a few days a week, and the average business traveler is looking for a much tighter schedule, said Ponder Harrison, the managing director for the Las Vegas airline.

Allegiant is PTI's only deep-discount airline, after Skybus declared bankruptcy last month.

But discount is where the comparison ends, Harrison said.

What makes Allegiant such a success — it earned nearly $10 million in the first quarter — is its flexibility and what could be termed a rational approach to running an airline, Harrison said.

That approach — Harrison prefers to call it "innovative" rather than conservative — almost led to a pullout from PTI as Skybus was ramping up its hub here.

But when that airline went bust in early April, Allegiant decided to stick around.

It's too early to tell whether the revived Allegiant at PTI will be a success. Currently, it's offering very deep discounts, with some flights as low as $29 each way.

"We had not been selling the market when we announced we were not going to be there," Harrison said. "We've been charging very, very low prices to restimulate the business. You've got to fill (planes) up with the ability to make money. We're assessing it. We want to make it work, providing fuel prices don't run away with it."

"It" is the cost of doing business. And when a flight becomes expensive, Harrison said, Allegiant makes the tough decision and pulls out, as it had planned to do here. But heavy competition is also a factor. Skybus had an "irrational" business plan, he said, and "we didn't want to be collateral damage in their wake."

Cost is why you are not likely to see the airline offering non-stop service to its Las Vegas base from PTI — it's just too expensive to fly a passenger jet with discount fares for more than 900 miles with the high cost of fuel, Harrison said.

"You have to be brutally honest right now," Harrison said.

Florida is the right distance and the right market, he said. And even in good times, Allegiant carefully manages its flights during peak and low-demand periods. After schools resume in the fall, for example, the airline may temporarily reduce or suspend certain routes.

One of Allegiant's biggest money makers is its relationships with hotels, Harrison said. Allegiant offers reservation packages with 50 Las Vegas Hotels and the other 50 spread through Phoenix and Florida.

In addition, he said, it is one of the largest wholesalers for Alamo rental cars.

"We are selling the entire leisure travel experience," he said.

Contact Richard M. Barron at 373-7371 or richard.barron @news-record.com

Accompanying Photos

Photo Caption: Allegiant Air began flying from PTI last spring.

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