Allegiant gave an investor presentation this week, and there were a lot of juicy nuggets of info in there. It looks like Hawai’i is delayed thanks to regulatory issues, and the airline seems to be experimenting with a route that JetBlue already flies: Long Beach to Las Vegas. I’m guessing these two things might be related. There were also some interesting points about the Orlando airport switch. Add to that the project to increase the number of seats on the MD-80 fleet and you’ve got an incredibly busy airline.
Hawai’i in 2012
According to Allegiant, Hawai’i is “now a 2012 goal.” Why? It’s a regulatory issue, and really, 
it’s one the airline probably could have seen coming. Allegiant was initially trying to do three things from a regulatory standpoint at once in order to get to Hawai’i. First, it had to get the 757 on its operating certificate since it hadn’t flown that airplane before. Then it had to get “flag” status for the airline, which is required for flights to Hawai’i because of the distance from the mainland. Lastly, the airline needed to get approval to fly the 757 over water for long periods of time without a nearby alternate (called ETOPS). That was aggressive and it’s just not going to happen.
Instead, Allegiant is going to get two 757s flying in 2011 (hoping for a summer start) on routes on the mainland. The other airplanes are being leased out until the airline can fly to Hawai’i. But where are these airplanes going to fly on the mainland? Other than on charters, we can expect to see the 757s flying on flights over four hours from Vegas as well as on “current, dense routes.” I imagine that’s something like Bellingham-Vegas, which is flown multiple times daily during the peak season.
Once that’s all up and running, then Allegiant will work on getting ETOPS for the fleet. The goal is to then be able to fly to Hawai’i by summer 2012. And that leads me to the next interesting note.
Allegiant Starting Long Beach-Las Vegas Against JetBlue
It looks like Allegiant doesn’t really know what to do with its 14 weekly Long Beach slots, so it’s now turning to what it calls an “experiment.” The airline will begin flying from Long Beach to Las Vegas, a route that JetBlue already flies three or four times a day depending on the season. Why would the airline do this when its goal is generally to avoid direct competition like the plague?
I think Allegiant is at a loss for how to use its slots. Right now, it flies twice a week to Bellingham, Colorado Springs, and Idaho Falls. Those will continue. It also flies three times a week to Stockton, and that is awful. It’s one thing to lose money for a few months while you wait for the Hawai’i flying to start (at least, I continue to assume that’s what the slots will be used for), but it’s another thing to keep losing money all the way into 2012. How do you sit on the slots without losing a ton of money?
Since Allegiant has to use half its slots consistently in order to hold on to both of them for the future, it has to do something. It also doesn’t want to base an aircraft in Long Beach and it doesn’t like having crew overnights. The airline does Idaho Falls, for example, by flying Vegas-Idaho Falls-Long Beach and back all within a day, but there aren’t many dots on the Allegiant map that can fit in so much flying like that. So Allegiant is turning to Vegas to fill the void and hopefully stop the money pit from growing. I’ll be very curious to see if it works.
The Orlando Airport Fight
When Allegiant decided to move some of its flights from Orlando/Sanford over to the main Orlando airport, I figured it would be a matter of time before everything moved. But Allegiant went the opposite way and instead recently decided to move everything back to Sanford. Why would you move to an airport that’s all the way on the other side of the city from where the main attractions are?
In the presentation, Allegiant revealed that its costs excluding fuel were 25 percent higher at Orlando than at Sanford. That’s not a surprise. Sanford is a small airport with very little service on the wrong side of town from Disney and friends. Orlando is the main airport in town, so you would expect costs to be somewhat higher. You would also assume that revenues would be higher too, but in this case, apparently it wasn’t enough for Allegiant to stick around. I assume there’s a lot more behind this story that we don’t know, and probably never will.
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Combine everything here with the airline’s efforts to add 16 seats to every MD-80, and you have an incredibly busy airline working on a million different things. So far it doesn’t appear to have necessarily distracted the airline that much, but I imagine it really has the potential to do that. It’s worth keeping an eye on these guys just to see if they can keep up.
17 comments on “Allegiant Delays Hawai’i Until 2012, Goes Head-to-Head with JetBlue”
Second to last paragraph. You should write “its” instead of “it’s.” You can delete this comment when you make the change. Love your blog!
how are they adding 16 seats to every MD80? seatguru reports their MD83s and MD87s are already at a knee-crunching 30 inches and there is no first class section to remove???
also, in lieu of beating their heads against the wall w/ LGB-LAS (which not only competes w/ B6 directly but also competes with about 50 airlines at LAX, about 50 WN flights per day from BUR, etc.), i thought they should instead experiment w/ LGB flights to AZA (phoenix-mesa) to see if they can create a secondary airport to secondary airport run between two major metro areas.
@Bill from DC:
(1) Seatguru is wrong. Allegiant’s pitch is a lot greater than 30 inches, at least on most of its MD-80 aircraft. 150-seats at all-economy is a modest number of seats to put in an MD-82/3.
(2) they’re stripping out the rear galleys. American and Delta have recently done similar things to their MD-80s
thanks… that makes more sense. very disappointed that the usually-reliable (at least IMO) seatguru is so incorrect!
G4 have purchased MD83s from so many different people, I think the logic of their flights is that “there’s always at least 150 seats” currently. I’ve been on G4 ex-SAS MD83s where the galley occupied three rows near the back, where there could be passenger seats on the side with 2 seats (so that’s 6), and then squeeze another two full rows (another 10), and you have 16. two additional rows should drop seat pitch by about 2″ (given there’s 31-33 rows right now); although it’s really quite generous at the moment
“””””Allegiant revealed that its costs excluding fuel were 25 percent higher at Orlando than at Sanford.””””
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What? They didn’t know how much they would be paying to use MCO BEFORE they moved to figure this one out? Maybe they didn’t like being a small player at MCO with no clout and wanted to be pretty much the only player at Sanford. More like either Sanford offered a better deal to return or Allegiant was having to many confused passerengers showing up at the wrong airport and it was costing them to many problems.
I was just reading costs to LAS were higher then they used to be, so a lot of people in Southern California go to Vegas so they might as well grab some of the business and keep the slots active. It’s a short trip so not much is needed in the way of onboard service, and their website is one stop shopping for flights and hotels so they should do alright.
I’ll bet MCO offered them a one year deal to entice them. Did no one notice they moved back to SFD *exactly* one year after starting at MCO ?
Apparently the Stockton service was so “awful” that G4 just announced that they are discontinuing. No big surprise…
The paper today had a story about the Stockton-Long Beach service and that tomorrow (Dec 12) was the last day. The service fell short with 10,000 people going Stockton-Long Beach between July and November which Allegiant doesn’t think was good enough. They usually have about 90pct loads and the Stockton-Long Beach service peaked at 85pct in October and was down to 81pct for November after the cancellation was announced.
The Stockton airport is enlarging the waiting area and hoping Allegiant will include a Stockton-Hawaii service in 2012.
How hard can it possibly be to get “flag status” — does it really involve more than filling out a two page form, submitting it together with a $15 filing fee to the FAA or DOT or some other three-letter government agency and then slapping little US flag decals on the sides of each aircraft?
The Hawaii delay really seems to be indicative of poor planning. That’s more than a one year delay.
Sanford is not merely on the other side of Orlando. It is also some distance from Orlando.
Sounds so familiar, airline growing, gets new plane type for something, but then doesn’t plan on what that means, and is stuck trying to scramble to find somewhere to put them.
I wish them luck, hope they aren’t falling under the “Beauvais” syndrome.
I got an email from Allegiant this morning about a free flight from LGB to Vegas so I figured I’d check it out, even though I knew pretty well I wouldn’t buy (the offer is only good till midnight today, requires a hotel room booked through Allegiant, and only gives 2 free plane tickets per booking). I found their web site as deceptive as ever. This time it was the kids — the web site says to list all kids age 0 and up with their birth dates, so I did, but then it treated the infant as if I wanted to buy him a seat. I’m sure there’s fine print somewhere on the site that says if you have a lap infant you just don’t put them on the reservation, but the way they have it set up is confusing. Same for the hotel — since we now had 5 in our party (including the infant), it required 2 rooms even though most hotels will allow an extra infant beyond a room’s official capacity.
Allegiant are not alone with the hotel thing, I’ve experienced incorrect “maximum capacity” errors with Expedia as well. But I haven’t encountered the lap infant deception with any other airline web site. Oh well, we knew Allegiant are really keen on the upsell. I’m probably not going to fly to Vegas anyway; Cajon Pass, here I come!
Head to Head with soon to be AirTran (soon to be SWA).