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Allegiant Outlines Low-Cost 2021 Recovery Strategy

Allegiant Outlines Low-Cost 2021 Recovery Strategy
Joe Cortez

Allegiant Air believes they, like other low-cost carriers, could be in the best position to recover faster than their legacy competitors. In a recent interview, the airline CFO outlined their plan to bring back flyers in the second half of 2021.

Low-cost carriers have claimed throughout the COVID-19 pandemic they will be the first ones to recover. In their fourth-quarter 2020 earnings call, Spirit Airlines once again expressed their optimism at being among the first to return to profitability. Allegiant Air is saying the same things – and outlined some of their plans in a recent interview with CNBC.

Allegiant Focuses on “Pent-Up Leisure Demand” and Leisure Markets

As part of their strategy, Allegiant has often focused on secondary airports to serve vacation-focused cities. With travel effectively grounded for nearly a year, the Las Vegas-based carrier believes they could soon be seeing more flyers than before.

“If we could use one word to describe it [Allegiant’s approach to 2021] would be flexibility,” Allegiant chief financial officer Greg Anderson said in the CNBC interview. “There have been some leading indicators that suggest that in the mid-to-back half of ’21, there’s some pent-up leisure demand that we should be able to support and fly.”

When it comes to expanding their network, the airline looks at where people want to go, instead of serving business-focused city pairs. New service is focused around underserved vacation spots, population sprawl and access to air carriers, and even Google searches.

Above all, consumer demand drives where and how often Allegiant’s aircraft fly. The carrier focuses on “hyperseasonal” routes, providing flights to leisure destinations at the height of tourist seasons.

When the COVID-19 pandemic forced airplanes to stay parked, Anderson said it only created an “intensified version” of Allegiant’s low-cost model. With that in mind, they believe that flyers will be ready to take a real vacation in 2021, and passenger traffic could increase by the summer.

“We were pleasantly surprised by September [2020] demand,” Anderson said, when asked about an extended summer vacation season. “We can definitely see that again in 2021.”

The entire interview is available on CNBC’s website.

Low-Cost Carriers Continue Investment in Passenger Experience and Loyalty Programs

With a particular focus on capturing leisure travelers who may only fly once or twice per year, America’s three low-cost carriers are using the pandemic to bolster their products. Spirit launched a completely new loyalty program in 2020, while Frontier Airlines offered status matches to celebrate changes to Frontier Miles. Meanwhile, Sun Country Airlines is looking to expand their bottom line through an IPO.

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