Allegiant - the most profitable airline in the US?
Jun 5, 2013, 12:16 am
#1
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Allegiant - the most profitable airline in the US?
From the WSJ:
The full article is here:
Allegiant Air: The Tardy, Gas-Guzzling, Most Profitable Airline in America
"...Over the past five years, amid bankruptcies, consolidation and soaring fuel prices, U.S. airlines have scaled back domestic air service by 14%, particularly in smaller cities, according to the Massachusetts Institute of Technology. Allegiant, meanwhile, increased its departures by 87%..."
"Allegiant's strategy has led to profits in 39 of its last 41 quarters. In the first quarter this year, its pretax profit margin was 18.5% on revenue of $909 million, compared with 13.4% at Spirit Airlines Inc. SAVE +1.19% and 5.2% at Alaska Air Group Inc. ALK +0.16% No other publicly traded U.S. airline surpassed 2.3%. Over the past five years, Allegiant's stock has risen 361%, closing at $96.38 Tuesday."
Allegiant Air: The Tardy, Gas-Guzzling, Most Profitable Airline in America
Jun 6, 2013, 8:45 am
#3
Join Date: Nov 2001
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Low ball prices and nickel/dime upcharges
I find it most hysterical that they charge $10/segment to book flights online. It's the "impulse buyer's upcharge".
They also charge $14/segment to book flights thru their call center (10-20 minute hold times), but, oddly enough, not to reschedule an already-purchased flight, even if you bought it at the ticket counter ... It's the "don't know how to use a computer" upcharge.
I still use 'em for turn-and-burns between TN and FL, but it really is the Greyhound, or more accurately, Megabus (low end travel, limited schedule and destinations) of the skies. But hey, that's why they're turning a profit ...
PS - as common courtesy, when you link an article, please indicate when it's behind a paywall.
They also charge $14/segment to book flights thru their call center (10-20 minute hold times), but, oddly enough, not to reschedule an already-purchased flight, even if you bought it at the ticket counter ... It's the "don't know how to use a computer" upcharge.
I still use 'em for turn-and-burns between TN and FL, but it really is the Greyhound, or more accurately, Megabus (low end travel, limited schedule and destinations) of the skies. But hey, that's why they're turning a profit ...
PS - as common courtesy, when you link an article, please indicate when it's behind a paywall.
Jun 9, 2013, 5:09 pm
#5
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I use Allegiant because I'm based in Rapid City for six months out of the year. I regularly get $39 and $59 tickets to LAS or Mesa. I build in a day then use SWA or someone else to fly elsewhere. I FedEx my luggage and avoid carry-on fees (I just say they are medical supplies; they really are; deoderent, toothpastes, etc, never had an issue with this). I pay the extra $11.50 to bank my segments (avoiding any change fees) and 'splurge' for a window seat on the left side of the MD-80.
They really are a lifesaver to many in the area. The only other option is drive to DEN or pay extortionist type fares on the big guys.
Normal people fly G4. They're not all bus riff-raff.
They really are a lifesaver to many in the area. The only other option is drive to DEN or pay extortionist type fares on the big guys.
Normal people fly G4. They're not all bus riff-raff.
Jun 9, 2013, 8:45 pm
#6
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What is interesting is that ExpressJet tried something similiar using E145s following a partial divorce with CO (CO asked them to renegotiate contract and ended up with fewer ExpressJet flights when they said NO), but that quickly crashed and burned.
Their billboards said "And the best part, no Middle Seats." Guess that one middle seat on MD80s works a little better
I am impressed that Allegiant can make a profit, and I'd try them if I didn't have to travel to south Texas to catch one of their flights.
EmailKid
Their billboards said "And the best part, no Middle Seats." Guess that one middle seat on MD80s works a little better
I am impressed that Allegiant can make a profit, and I'd try them if I didn't have to travel to south Texas to catch one of their flights.
EmailKid
Jun 14, 2013, 1:52 am
#7
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The one time I flew 'em on GSP-PIE RT was tolerable, though the plane was a Finnair hand-me-down with overhead bins that were too shallow to fit rolling bags lengthwise.
From the route map the strategy appears clearly to cater to people in small towns who'd like to go to Florida, Las Vegas or Phoenix, probably for vacation. While some may have other reasons, this group is generally written off by the legacies as too price-sensitive, and certainly many of the cities served are otherwise under-served, particularly by jets.
They'll also go for under-served airports in destinations like PIE that might cut a good deal. For the passenger, though, rental cars in those places can sometimes be a real gotcha, as the supply hasn't caught up to the sudden demand.
As with Spirit, a lot of the profitability depends on the unbundling game and lots of people ending up paying more than they thought they'd pay. The Obama administration thankfully has cracked down on the worst practices there (e.g. hidden mandatory fees), but that still leaves some maneuvering room.
Legacies are also creating a real vacuum now by limiting seats so as to raise fares
From the route map the strategy appears clearly to cater to people in small towns who'd like to go to Florida, Las Vegas or Phoenix, probably for vacation. While some may have other reasons, this group is generally written off by the legacies as too price-sensitive, and certainly many of the cities served are otherwise under-served, particularly by jets.
They'll also go for under-served airports in destinations like PIE that might cut a good deal. For the passenger, though, rental cars in those places can sometimes be a real gotcha, as the supply hasn't caught up to the sudden demand.
As with Spirit, a lot of the profitability depends on the unbundling game and lots of people ending up paying more than they thought they'd pay. The Obama administration thankfully has cracked down on the worst practices there (e.g. hidden mandatory fees), but that still leaves some maneuvering room.
Legacies are also creating a real vacuum now by limiting seats so as to raise fares
