The only thing I’d heard surrounding Allegiant’s Hawai’i flying recently was regarding mechanical problems impacting half the 757 fleet. That caused a bunch of cancellations but it didn’t indicate anything about how well or how poorly the flights were performing from a revenue perspective. Now we know, however, that Allegiant is cutting a lot of Hawai’i service this Fall. With most airlines, that would be an admission of failure, but that’s not always the case with Allegiant.

This summer, Allegiant is flying from a bunch of different places to Honolulu. In traditional fashion, it’s spreading around its service with just a flight or two each week per destination. So while Allegiant serves Honolulu from nine cities, it only has 17 flights a week. Here’s how it looks:

But starting mid-August, Allegiant cancels all service through the Fall except for 4 weekly flights split between Vegas and Bellingham. Here’s how that looks:

That’s a really big cut. But does it mean the service is failing? With some airlines, it would mean that. But it’s not necessarily the case with Allegiant. The truth is that after mid-August, summer travel demand starts to tail off. After Labor Day, pretty much all the kids are back in school and that means that leisure travel demand really tanks. Business travel picks up, but remember, Allegiant isn’t attracting any kind of business traveler with such infrequent flying.

This isn’t all that different from the strategy employed by Allegiant in other markets. Take a look at the operations in Florida in September. Allegiant has several bases in Florida that account for a huge chunk of the airline’s network. But the airline literally operates half the capacity in September that it operates during a peak week in July. Flights are cut way back because demand is less. Granted, the percentage cut in Hawai’i is greater, but there also just aren’t that many flights in the first place.

Another thing to consider is that this doesn’t appear to be a last minute decision. Allegiant just extended its schedule for booking through October 28 and that’s when people noticed that many of those Hawai’i flights had disappeared. It’s not like they were originally for sale and Allegiant canceled them. This was part of the plan.

Where I think people get nervous is that Allegiant, via spokesperson Jessica Wheeler, told me that they “anticipate the flights coming back for the holidays, but no dates [are] set.” That might seem strange, but remember, Allegiant isn’t taking bookings past October anyway. So it’s no surprise that the dates aren’t set, because flights aren’t for sale yet.

Just because that isn’t a surprise doesn’t mean it’s a good plan. People always like to book holiday travel further in advance than usual, and this is especially true for Hawai’i. So you have a lot of people now sitting here wondering whether they might be able to fly Allegiant or whether they’ll have to connect on someone else. Since the schedule just opened through October, I imagine they’ll have to sit and wait for awhile, unless they decide to just jump on a connection because they don’t want to take a chance. Allegiant might want to sell a little further out in the future.

At this point, it’s hard to speculate how well the routes have done, but we’ll know more eventually. Depending upon which markets come back, when they come back, and how many flights they see, we can start to get an idea of which routes might be doing better than others. But just the fact that they made it through the summer means that they’re probably doing ok or they would have been cut sooner. After all, the Monterey flight was canceled before it even started.

[Maps via Great Circle Mapper]

It turns out United isn’t the only airline suffering from poor on time performance these days. Spirit hasn’t had more than 70 percent of flights arrive on time since April while Allegiant seems to be in the same boat. That’s not good. Why haven’t you heard about this? Because it isn’t easy to find.

The Department of Transportation only requires airlines with more than 1 percent of total domestic scheduled service passenger revenue to report this data for its monthly report. For everyone else, it’s optional. The only one who voluntarily reports is Mesa, and I imagine that’s because it used to be big enough that it had to report at one time.

But neither Spirit nor Allegiant report, so how did I get the data? Oh, it’s out there in one form or another. I turned to my two favorite tools, masFlight and FlightStats, for details. Here’s how it looks:

This shows arrivals within 14 minutes of schedule, the number used by the DOT to designate a flight as being on time. The green line is the DOT average for the industry. That data has only been released through June so it stops a little short. The red line is Spirit’s data from masFlight. The August 2012 one only goes through August 25 since, well, August isn’t over yet. And the blue line is Allegiant’s info from FlightStats. The problem with Allegiant’s data is that you can’t find that airline’s on time performance info anywhere, including on its own website. So this uses the runway departure and arrival times. That means if anything, Allegiant’s data is overstated. It takes a little more time to get to the gate, so that could make even more flights late if they had those details.

What you can see is that Spirit and Allegiant have fairly consistently lagged the industry. For Spirit, things really fell off a cliff starting in May. It’s interesting to note that July and August of last year were also pretty terrible for the airline, but that doesn’t necessarily mean those are seasonal issues. It could be coincidence. But if they are connected, then you would hope Spirit would have learned from its mistakes last year and fixed them for this year.

Allegiant, meanwhile has been terrible more often than not. It has had a couple of random months where on time performance has looked at least half decent, but then it falls right back down again.

Regardless of what is causing this (neither Spirit nor Allegiant responded to my request for comment), it’s a real problem. Ultra low cost carriers can get away with a lot since people are willing to endure a great deal to save money. But a poor on time record is generally one of the things people won’t accept. This is particularly true for an airline like Spirit, which allows connections. It’s bad to be late, but it’s really bad to miss your connection when you could be stuck for awhile.

Even Ryanair, the king of the ultra low cost carriers, knows this fact. According to Ryanair’s own reporting, it tends to hover around 90 percent on time. Even if you don’t believe that, this independent look at arrivals at UK airports shows that Ryanair is certainly above 80 percent for the last couple years.

What does this mean? Well, every airline needs to run an on time operation to keep it customers happy but it’s particularly important for ultra low cost carriers since there isn’t generally a high level of service to fall back on. Spirit and Allegiant seem to be falling down in this area. If they don’t get their acts together, they’re going to have a hard time getting people to keep buying tickets.

If you live in LA and are a fan of Allegiant (or Sioux Falls, Billings, and Pasco), you aren’t going to be happy. The airline is struggling to find a gate to use at LAX, but it can’t. So as of September 1, it is cutting three cities from its LAX schedule. This descent into homelessness is partially because of a temporary construction problem blocking some gates, but that doesn’t mean it’s a problem that couldn’t have been overcome with some creativity. It appears, however, that LAX isn’t interested in being creative. How did we get here? I’ll explain.

Really, we can just blame Alaska Airlines for all this. Not really, but that is where our story begins. Allegiant was using Terminal 6 for its operation at LAX, but Alaska made a deal to take over most of that terminal after putting in a bunch of money to fix it up. That left Allegiant in a bind. So when Alaska moved in, Allegiant made a deal with Delta to use a gate over there. See, Delta controls Terminal 5 and it apparently had some room for Allegiant. So Allegiant kept its ticket counter in Terminal 6 but had a gate in Terminal 5 right next door. Was it perfect? No, but it worked fine. Allegiant was lucky that Delta was willing.

The problem, of course, is that Delta reserved the right to tell Allegiant to go away if it needed the gate space in its own terminal (as it should). Sure enough, that time comes on September 1. Delta can still give Allegiant some room in Terminal 5 but not enough to run the entire operation. So Allegiant did what you would expect it would do. It went to the airport for help.

LAWA’s Lack of Options
Los Angeles World Airports (LAWA), the agency which runs LAX along with Ontario and Van Nuys airports, didn’t have an ideal option to give. Terminals 7 and 8 are under United’s control. We already talked about Terminals 5 and 6. Terminal 4 is under American’s control. And Terminal 1 is bursting at the seams with Southwest/AirTran and US Airways. I can’t imagine the Bradley international terminal was an option, so that left Terminals 2 and 3.

Terminal 3 is the natural fit. When Alaska left, there was a ton of room in Terminal 3. But LAWA is busy building a palatial new concourse at the Bradley terminal and there’s a lot of taxiway work going on as part of that project. So, LAWA decided to shut off a bunch of gates in Terminal 3 until that work is done. According to a presentation I found, that should be at the end of 2012. (After repeated requests, LAWA never did get me the exact answer as to when that should be completed so I started digging myself.)

That left Terminal 2 for Allegiant. Clearly that wasn’t an option because the flights are going away, but I couldn’t understand why initially. Terminal 2 has almost no domestic operations anymore, so it should have some decent gate availability during the day when Allegiant would need it. I went to LAWA to ask why Allegiant couldn’t get gate space, and the PR team didn’t seem to even know that there was an issue. I told them a press release had been put out by Allegiant about it and they asked me to forward it on to them so they could see it.

Terminal 2 to the Rescue?
After doing some digging, LAWA came back and told me that Allegiant had in fact been offered space at Terminal 2. The plot thickens. So why would Allegiant turn that down? This is the point where you assume it’s some political game. Maybe those Allegiant routes weren’t doing well and this was a convenient excuse to end them. Or maybe Allegiant is trying to use this to get lower rates somehow. It wouldn’t be the first time something like that has happened in this industry.

But that doesn’t seem to be the case. I went back to Allegiant and asked about Terminal 2. There were apparently two reasons why this wouldn’t work. First, the technology used in that terminal is SITA technology, and Allegiant isn’t SITA certified. You would think that’s Allegiant’s problem, but Allegiant spokesperson Jessica Wheeler did say that LAWA “did not want to allow any work around.”

Really, however, that’s not as big of a deal as reason number two. Apparently, LAWA couldn’t get them decent ticket counter space. According to Jessica, “we were told we would have to switch ticket counters in the middle of check in. The counters they wanted us to use were 450 feet apart. When we suggested using portable carts rather than counters they said no.”

Wow, that sounds unworkable to me. Oh, but there was one more solution . . . go to Ontario.

Give me a break. If Ontario were cheap, then I bet Allegiant would be there already. But it costs more to operate at Ontario than at LAX today and it’s in a far less desirable location. No airline in its right mind would make that move today.

That leaves us where we are today. Allegiant is cutting three cities. (I assume those are their worst performers.) And since Allegiant just found out about this problem (thanks Delta), it has to cancel flights that are less than a month away. That means there is real inconvenience here. On top of that, the remaining flights will likely have to be rescheduled in order to fit into the times it has gate access. There are going to be a lot of angry travelers.

I just find it incredible that LAWA couldn’t find a workable solution to this problem. I’m assuming it’s because it didn’t really feel the need to work hard at this. You always hear them throwing out numbers about how important new international flights are to the LA economy, but they don’t care nearly as much about domestic operations. That means a lot of potential travelers aren’t getting flights that should be operating. What a shame.

Yesterday, Allegiant announced that it would add a third aircraft type to its stable. The airline’s first A319 will be delivered in the fourth quarter of this year and Allegiant will take a total of 19 aircraft to start. I’m not surprised that Allegiant went this route, but I guess I am a little surprised at the timing.

After a few fits and starts, Allegiant found its groove by picking up airplanes nobody wanted. Airlines didn’t want the MD-80 because the fuel and operating costs were higher than newer models, but because the airlines didn’t want them, Allegiant could get them for cheap. Low ownership costs plus higher operating costs still made for a great deal and Allegiant grew to have 58 of the airplanes, making bank all along the way.

But the MD-80 couldn’t serve every route Allegiant wanted. The first effort to stray was to get some 757s to fly to Hawai’i. But the 757 is a big airplane so it’s hard to see how it could really fit into Allegiant’s style of service on the mainland.

Allegiant could have continued to buy MD-80s (there are still hundreds of them flying), but the airplane has limitations. It’s a runway-hog and can’t operate off of some smaller airports. Gary, Indiana comes to mind as a place that initially had Allegiant’s service canceled because of runway issues. Also, the MD-80 doesn’t have excellent range for some of the longer routes Allegiant might be interested in serving.

So it’s no surprise Allegiant would be interested in newer airplanes that fix that problem. I always thought some of the longer range 737-400s and -300s that US Airways has been getting rid of would be good airplanes. But Allegiant leapfrogged that idea to a newer airplane that’s certainly lower cost to operate. The reason I’m surprised about the timing is that I can’t believe ownership costs have dropped enough on a current generation model that it made sense for Allegiant to go that route.

A319 Freefall
But that appears to be exactly what’s happening with the A319. Think of the A319 – who wants it? Most airlines are moving toward larger airplanes with their narrowbody acquisitions. Southwest built its operation on the similarly-sized 737-700 but it is currently taking delivery of a bunch of larger 737-800s. Delta and United have gone even bigger with 737-900 orders. And US Airways is retiring 737s in favor of much larger A321s. Only American really wants A319s at this point in the US.

More importantly for Allegiant, Cebu Pacific no longer wants its A319s and instead wants A320s. Also, easyJet has been slowly shedding its older A319s for the last year. So larger airplanes are doing well, but the values of the A319s are apparently collapsing quickly. Allegiant posted this slide in a presentation on the A319 acquisition:

This chart assumes that Allegiant keeps the same low utilization of 8.9 hours a day that it has today on its MD-80 fleet. As you can tell, the ownership costs are double those of the MD-80 but the savings are much greater in terms of maintenance and fuel. (Allegiant learned the hard way that maintenance is expensive when it spent millions on rehabbing engines.) If utilization goes up, savings go up as well.

Packing ‘em In
So when others don’t want the A319, Allegiant can pounce. But Allegiant is going for a very specific type of A319. It is leasing all 10 of Cebu Pacific’s airplanes along with 9 that were operated by easyJet. What’s so special about these? They have two overwing exit doors on each side while just about all the others have one. Why the difference? Well, the additional exits mean they can jam in extra seats above and beyond 145. Allegiant will operate these airplanes with 156 seats. For comparison, JetBlue puts 150 seats on an A320, a much bigger airplane.

This is a little surprising since those 6 extra seats above 150 mean Allegiant will need another flight attendant onboard. It’s hard to imagine that’s worth it. Maybe one of these days Allegiant will pull a row out, but that’s not the plan for now. For now, it’s all about cheap fares and jam-packed airplanes.

There’s good news and bad news with this. The good news is that these airplanes can fly further and into airports with shorter runways, meaning new routes could be opened up. The bad news is, your knees are going to pay. That’s not too bad on a short flight, but if these airplanes do start stretching their legs across the country, then it might be a tough to take.

Will other carriers copy Allegiant and Spirit with new carry-on baggage fee? – APEX Editor’s Blog
I look at Allegiant’s carry on fee, and whether others might follow.

In the Trenches: Wrestling with Business Hours – Intuit Small Business Blog
I’m wrestling with setting “soft” business hours for Cranky Concierge, but I can’t decide if it’s a good plan or not.

Southwest–AirTran Merger: Tech Troubles Are Going to Make It Tough – Conde Nast Daily Traveler
I dive in to some of Southwest’s tech problems and how it’s making the merger more difficult for consumers.