What is Allegiant Air Thinking?

I haven’t written about Allegiant in awhile, but I think the time has come. Its decision last week to pull out of Long Beach is just one of a few odd choices that we’ve seen coming from the airline recently. I’m trying to figure out what exactly is going on over there.

Let’s start with Long Beach since my home airport is always top of mind for me. Allegiant just announced it will end flights here in November. The press release gave no reason, and I received no response from Allegiant despite sending a request via email and leaving a voicemail. So all we can do is speculate.

Allegiant Says Aloha to Long Beach

This is a very strange, surprising move. When Allegiant first started flying to Long Beach last year, it didn’t seem like a city that would fit into the Allegiant model . . . until Hawai’i came into focus. With Allegiant acquiring 757s to fly to Hawai’i, Long Beach would be a natural jumping off point for the airline. So the expectation was that Allegiant would just sit on those slots until the 757s got up and running.

Meanwhile, the Hawai’i plans kept getting delayed as the airline realized that introducing a new aircraft type and getting certification to fly over long stretches of water far from land (ETOPS) took a lot longer than expected. The 757 is now flying but Hawai’i still hasn’t started.

In Long Beach, Allegiant struggled to find anything that would work. It began Bellingham along with ill-fated flights to Stockton (which I can’t imagine anyone thought would work) and it moved flights that were going to LAX over to Long Beach from places like Idaho Falls. Nothing really stuck. Had Allegiant given up and decided to cut its losses then, I wouldn’t have been surprised. But in April of this year, when Frontier relinquished its slots, Allegiant ramped up and actually took a third slot. It switched the strategy to send all flights to Las Vegas. JetBlue ramped up to Vegas as well, and that must have been ugly.

But what could Allegiant expect? Flights from the LA Basin to Vegas are plentiful and cheap. It couldn’t have expected much, but again, I assumed it was just an effort to find a better place to park slots until Hawai’i started. Now, after almost a year and a half, Allegiant is scrapping the whole plan and walking away. Other airlines will get slots. (My bet is on JetBlue and Delta, though Alaska would be smart to grab a slot and start Hawai’i itself now that Allegiant is giving up. I bet there’s a market there.)

Let’s read the tea leaves here. Why would Allegiant give up now? There are four reasons that seem possible.

  1. Hawai’i is off the table. Maybe Allegiant is seeing success with its 757s on domestic routes to places like Lexington and Knoxville from Vegas and doesn’t want to bother with Hawai’i anymore. Or maybe the 757s aren’t long for this world with the airline now that it’s seen the characteristics of the airplane. That would be a big change in strategy, and it would be a surprise if true.
  2. Hawai’i is delayed longer. At last check, I thought Hawai’i was now scheduled for later next year. That’s a lot longer than Allegiant thought it would have to wait when it came into Long Beach, and maybe it’s not comfortable taking the losses anymore just to hold on to slots. But why would that decision be made now and not several months ago when delays were already known? Maybe more delays are in the pipeline and we just don’t know it yet.
  3. Long Beach to Hawai’i is no longer interesting. I can’t imagine that this would be the case. I mean, if it was interesting 3 months ago when a 3rd slot was acquired, it shouldn’t be much different now. But, this could be a sign of internal strategy issues at the airline. Maybe there’s a question about how it wants to serve Hawai’i and Long Beach is now the odd man out?
  4. Hawai’i was never the plan from Long Beach. What if the airline actually thought it was a good idea to go in there on its merits? That didn’t work, so now it’s pulling out. That seems crazy, of course. I think most people could have told you that Long Beach to Stockton or Idaho Falls wasn’t going to work. That’s why everyone assumed Hawai’i was the plan. Besides, the Long Beach flying was so far removed from the airline’s strategy in general that it wouldn’t have made much sense. Then again, this wouldn’t be the only goofy thing Allegiant has done lately with routes. . . .

If you missed it, Allegiant is now going to start flying six times a week between its two bases in Las Vegas and Phoenix/Mesa. This is a big departure from the airline’s strategy of trying to avoid big routes with competition. Sure, Phoenix/Mesa is a different airport, but it has a much smaller catchment area compared to the much larger operation of Southwest and US Airways at Phoenix’s main airport. This isn’t the usual small city to big city route that has made Allegiant the winner that it is.

Even stranger is the schedule. Allegiant will be running two daily flights on Friday and Sunday tying up an airplane from 250p in the afternoon until 930p at night. That’s certainly a good peak time to fly to Vegas on Friday and back on Sunday, but these airplanes are doing roundtrips. I can’t imagine the Friday out of Vegas and Sunday back is going to be a winner. This use of an airplane during primetime is a little concerning. Shouldn’t Allegiant have better ways to use an airplane on those prime travel days? Apparently not.

Oh sure Allegiant continues to churn out new routes in its typical pattern of connecting small cities to big cities, some that work and some that don’t. Some don’t even get off the ground. Just last week, a planned announcement for service to Gary, Indiana was called off at the last minute when Allegiant informed the airport that the runway wasn’t long enough. Allegiant says that an announcement of a deal was “premature” but clearly at best there are some major communication issues on service plans.

It’s been an interesting few months at Allegiant. If only I could be a fly on the wall at that place.

25 Responses to What is Allegiant Air Thinking?

  1. Zack Rules says:

    Speaking of strange moves, Allegiant just announced service from Niagara Falls to St Petersburg/Tampa twice a week. Of all places, I just don’t see that working out well since Southwest already flies a very similar routing, Buffalo-Tampa, nonstop twice daily. The only thing I can think of is that Niagara Falls Airport is closer to the Canadian border so it is easier to fill planes up with those folks but even then, Buffalo Airport is still 20 minutes up the road (no traffic ever in Western New York).
    Their other bases, Las Vegas, Phoenix/Mesa, Orlando/Sanford, Fort Lauderdale, and even Myrtle Beach are all well served from the Western New York region too. Any thoughts?

    • CF says:

      Thanks for bringing that up. It is another odd one for sure because Buffalo and Tampa are more convenient for most people on this route. So Allegiant can only win on price with this, and if Buffalo prices drop, then Allegiant is the odd man out.

  2. How can they say Gary doesn’t have a long enough runway? Airnav shows Gary and Lexington both having a 7003 ft runway.

    If they tried LGB-LAS to hold slots, you would have thought they would have done LGB-Mesa since no one else flys that.

    For an airline that wants cheap fares to get the leisure traveler, Hawaii which already has tons of service and travelers on tour packages, plus the 10ish hour roundtrip flight, I think it would not be a good fit for them. Look how many flights they could have in other markets in that 10 hour time frame (not counting ground time). If they do still want Hawaii, it would be from a bunch of smaller cities around the west coast that don’t have regular service and could handle one or two flights a week per city.

    If they are not up front about all this, then you have to think there is trouble brewing that they are trying to hide.

    • Joe says:

      There’s issues with the lay-out of the runway at Gary. Apparently there is no safety buffer at the end of the runway and Allegiant has said that their MD-80s will have trouble clearing a railroad emankment at the end of the runway.

      There are plans in place to move the tracks and expand the runway, but it has been delayed a couple years. However, it looks like everything is coming together to get done by an FAA imposed 2013 deadline. The FAA has stated if the expansion is not completed by then, the FAA will designate the runway 1000ft shorter than it currently is.

    • Sanjeev M says:

      @David But the thing is Allegiant doesn’t care about utilization. It’ll use its planes for 4 hours a day if it wants. Their acquisition costs were so low that they don’t need ultra LCC utilization.

    • David M says:

      Nobody flies LGB-Mesa, but US Airways Express does several daily LGB-PHX with the CRJ-900.

    • CF says:

      Well, I believe the Gary announcement was supposed to be to Vegas, and Lexington to Vegas is only on the 757. So it’s no surprise that Gary would have problems with the MD-80.

  3. john says:

    No inside info here – what about these:

    5- They had a hard time selling their approach of add-ons to the LGB inbound folks (not just air, but air+hotel+car+tours). Sure, they might get some valuable package customers going LGB=>LAS, but that would be about it. Have you seen their booking path lately? Its a HARD sell on non-air products — even a transfer is defaulted as included. And whos to say LGB slots wont or will be available in late 2012 / early 2013 when the need them. Why wait it out in LGB with poor performing flights that long when you might be able to re-enter the market later anyway. Fuel might be higher then and slots will be available.

    6- LGB might mean too many Air-Only folks – I would think running a 2x weekly schedule from 3 smaller cities might get a better bang for the buck — esp. when considering their desire to sell packages. From LGB you may have a larger market – but also a larger market wanting just Air-only. But from Places like GEG, MRY, SMF, ONT, you might get more value folks wanting the package deals at some 2-3 star hotel in Hawaii. I wonder if they thought, gee we might have to sell 150 $198 RT air only from LGB where we have to be leary of HA/AS/UA/DL/etc, or sell 200 $350 RT packages from Spokane and just a few air-only folks.

    Also, Also -

    • CF says:

      On 5 – I think there just weren’t enough inbound folks to Long Beach. That’s why Hawai’i makes more sense, it would appeal more to locals. As for coming back later to Long Beach, that’s not likely to be so easy. The slots are full, so Allegiant would have to wait for someone to relinquish the slots before coming back.

      On 6 – That makes sense to me – could very well be the case.

  4. Ron says:

    As of a little over a week ago, Allegiant employees at Long Beach thought they were going to start Hawaii in spring 2012, and were referring to the Vegas flights as “fillers”. I would guess they got their information from within the company rather than from reading Cranky’s speculations :-)

  5. AirBoss says:

    So, Allegiant is in play…

  6. Jim says:

    I doubt Long Beach to Hawaii was ever part of the plan. There are too many airlines flying LAX to Hawaii, and Long Beach is never going to be able to compete. Even Continental’s SNA-HNL flights are underutilized from what I have seen, because people living in Orange County will drive up to LAX to save $100 round trip.

    • CF says:

      There is no doubt in my mind that Hawai’i was part of the plan. It doesn’t make much sense otherwise. While Long Beach is close to LAX, remember that Allegiant’s strategy would be very different than Continental at Orange County. Allegiant will bring VERY low fares to the market. For locals and those in Orange County, it will be a cheap and more convenient alternative.

  7. Ron says:

    Well, I will miss their ticket counter at LGB. Though on my latest ticket purchase I guess I lost my gamble: I was pretty much ready to buy, but then waited 5 days for a convenient time for me to get to the LGB ticket counter, so I saved the $17 convenience fee but in the meantime the r/t price went up by $38 for a net loss of $21 (multiplied by 4 people). Of course, I’m not really sure I was ready to buy 5 days prior… But I might just be better off without a ticket counter at LGB.

    Actually, I have to see if Allegiant still works for me with their new seating plan. They used to assign seats at the airport for those who didn’t purchase them online, but now it’s either purchase or open seating. Given how much my family suffers at the back of the MD, we purchased seats for our upcoming trip, but Allegiant now has this rule that unless you line up right at the start of boarding, you forfeit your purchased seat. We’ll have to see how miserable the line-up is. Still, Allegiant are the only carrier to offer non-stop access from L.A. to northern Arkansas and southern Missouri, so we’d probably be willing to put up with some funny stuff in order to avoid the connection.

  8. yo says:

    You almost have to feel sorry for Gary, IN. Sure, its in the Chicago catchment area, but…its GARY, IN! Gary would have to improve 100% just to be called a %&^-hole. No one wants to fly to Gary, no one wants to drive through Gary, no one wants to live in Gary. Its salted earth, its radioactive, its the only airport that the Mid-Cities airport in St. Louis can point to and say….”at least we aren’t them!”

  9. JD says:

    For the most part, Allegiant’s Business Model has worked. But some may remember, this is Allegiant’s SECOND attempt at a Long Beach operation, and clearly it hasn’t worked. Back in the late 90’s/2000 (When Allegiant was just a small “Regional” based in Fresno, California), they flew LGB to LAS. I flew them a lot since it was nearer to my home than LAX or SNA. Those flights, also on OLD Md-80’s were lucky if they had 25 Pax on them back then. It’s a shame because Allegiant is a GREAT success story, and now that I live in Vegas, it’s been convenient to get to out of the way places. I truly wish they wouldn’t abandon Long Beach AGAIN, and this time try to stick it out and establish a true NICHE for themselves. The Business IS there, they just need to be a little more patient (in my humble opinion).

    • David M says:

      Allegiant’s original LGB operation was actually with the DC-9-50. They came in shortly after WinAir shut down. From what I recall being reported at the time, their position was that LGB should have worked for WinAir (but WinAir seemed to lose focus after their founder went on a mission in South America or something) so they gave it a try. It didn’t seem to work out for them, either.

  10. Sigrid W. says:

    This is very strange. I live near Phoenix and I can’t imagine a flight to Vegas would be all that popular. It’s a really easy 5 hour drive. Why go through the hassle of flying?

  11. Daisy Dickinson says:

    Quite odd in a vawncast way but I do know Allegiant isn’t that well known so perhaps that could be a primary reason. They do have great service though.

  12. cindy says:

    While my comment does not have much to do with flight routes..it does have to do with the Long Beach/Vegas route. I flew Allegiant for the first (and LAST) time in September from LBC to LV. The cheap advertised rates are what pulled me and my friends in. We are all experiences/heavy travelers. Personally, I fly on average 2-6 times/mo. Flying a cheap airline, the add on fees and lack of service didn’t bother us- cheap, short flight- doesn’t matter. The flight out went off without a hitch, the flight back (LV to Long Beach)..well that is a different story. Now I am not one to comment on forums, or post bad reviews, but this is a story that I feel needs to be shared.

    I don’t know if this was a reflection of the aircraft itself or Captain Genevieve, but I have never experienced a ‘life flashing before your eyes’ moment as I did..on several occasions..on the flight back. Yes, MD 80s are older planes, but there was either something seriously wrong with the plane or the pilot. Shortly after take off, it felt as if the plane was loosing an uphill climb during the ascent. The noises coming from the engines and other parts of the plane were highly suspect. The entire flight felt like the plane was lurching forward, as it was constantly ramping up speed than slowing down. At one point, we did a pretty significant drop in altitude that silenced the entire plane. I looked around to make sure it wasn’t just me, but the looks exchanged among passengers said it all. There was another sound at some point that sounded like the landing gear was being put out…yet about 20 minutes later when that actually happened I found myself questioning what was happening before that. There were a few turns made where literally the plane was being controlled and turned to 180 degrees. The landing was absolutely atrocious and another crowd silencer- we came in at an incredibly uncomfortable high speed- if I had to judge I’d guess around 100 mph too fast. I noticed the couple next to me start praying, with a 55(ish) year old man white knuckled with his eyes closed. One of my girlfriends, whose seatbelt was being worn properly (albeit a bit loose..but how she typically wears it on all flights), ended up being forced forward that the seatbelt ended up around her chest. As the plane FINALLY came to a stop, again looks were exchanged and even comments were made about getting off the plane and never getting back on.

    I know for me personally, I will not be getting back on.

  13. Ron says:

    So the LGB slots go to jetBlue, Delta and US Airways. Yesterday’s Press-Telegram piece said they’re expected to announce new destinations. Really?! Like Atlanta and Charlotte? Please…

    • CF says:

      Indeed. Though I wouldn’t be shocked if JetBlue threw out a new city.

      For US Airways, it’s undoubtedly going to be used to upgauge the fifth flight to Phoenix. Today, US Airways has only four slots, so it uses a CRJ for its fifth flight which is allowed under a commuter slot. I imagine that will now become a CRJ-900 along with the other four.

      For Delta, it’s probably going to be another CRJ-900 to Salt Lake, though they are using their one slot to put an A319 there right now so who knows. But Atlanta? I doubt it. (Though I wish – it would open up a lot of one stop connections to places that can’t be reached today.)

      For JetBlue, I figure that with Allegiant gone, we’ll see JetBlue pare back its Las Vegas flights to a more normal level. Those extra slots combined with one new slot could work for a new city or they could just be redistributed to existing destinations.

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  15. Robert says:

    i would love to be able to fly into Long Beach From Kahului,Maui or Honolulu,HI it would be soo much easier to get in or out of Long Beach rather than LAX and traffic in the Long Beach area on the 405 isnt as bad as it is near,at, and past LAX its a shame that allegiant would pull out now they should just stick it out and once they start Hawaii service they would see that they made the right choice and plus airfares from Hawaii to LAX is way expensive now and Hawaii could use the extra seats from Long Beach

  16. Drew says:

    Why does allegient fly one to two times per week at some of its destinations? This is very strange behavior for an airline. I live near the GSP (Greenville/Spartanburg) airport and it has flight to Sanford, Ft Lauderdale, Tampa etc.. However, these flights can only be taken a couple of times per week. Why does this airline want to alienate potential customers? It does not make any sense.

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