Allegiant Focuses on Leisure Travel, Packaged Vacations
By Ryan Schuster, Grand Forks Herald, N.D.
Jul. 5–While most airlines are slashing flights and retrenching as a result of high fuel prices and a challenging financial situation, low-cost leisure carrier Allegiant Air is actually adding flights and destinations.
Las Vegas-based Allegiant, Southwest Airlines and JetBlue Airways were the only U.S. carriers to report a first quarter profit, according to the U.S. Department of Transportation.
“They are doing well because they are not in the airline business, they are in the tour business,” said airline consultant Michael Boyd. “Allegiant is a very unique thing. They are after leisure dollars. They sell basically tour packages to Las Vegas. They go places where they think there are dollars they can convert. They are basically a tour company with wings.”
Allegiant announced Tuesday it will begin year-round two-day-a-week air service from Grand Forks to Las Vegas starting Sept. 29.
“Grand Forks fits our profile,” said John Fenyes, Allegiant’s director of sales. “Our profile has always been to sell to markets that are underserved with good demographics and an interest in travel to Las Vegas.”
Allegiant’s general business model has been to provide low-cost air service from smaller communities like Grand Forks, Fargo, Bismarck and Duluth to vacation destinations Las Vegas, Phoenix, Orlando, Tampa-St. Petersburg and Fort Lauderdale, Fla.
Many of the carrier’s flights are purchased as part of vacation packages that include hotel rooms and rental cars.
“We’re very different,” Fenyes said. “We’re very targeted to our destination markets. It’s all leisure destinations.”
Allegiant has introduced limited introductory $99 one-way tickets for its Grand Forks-Las Vegas service, which must by purchased by July 26, valid for travel through Dec. 15. Regular one-way fares range from $129 to about $200.
Hal Gershman, who is a member of the Grand Forks Regional Airport Authority board of commissioners, attended an invitation-only seminar put on by Allegiant along with Klaus Thiessen, president and CEO of the Grand Forks Region Economic Development Corp., earlier this year.
He said Allegiant is able to keep costs down by keeping its own costs down and negotiating low expenses at the airports it operates.
“It’s a very smart airline,” Gershman said. “They said, ‘Talk to us about cost. Don’t talk to us about revenue.’ Revenue will come with volume.”
Fenyes said Allegiant’s flights are typically at least 85 percent full.
“They sell packages ahead of time,” said Boyd, who is president of The Boyd Group aviation consulting firm. “Their load factors almost everywhere are 90 percent because they sell them ahead of time.”
Dave Dague, a principal in Cambridge, Mass.-based aviation consulting firm Simat Helliesen & Eichner, said Allegiant has had success in Fargo and Bismarck. He said he expects the carrier to attract a strong contingent of Winnipeg-area travelers to Grand Forks for the cheap flights.
Travelers on Grand Forks-Las Vegas flights will fly on 150-seat MD-83 jets, bigger planes than many low-cost carriers use.
“They don’t cram you on the airplane,” Boyd said. “It’s a comfortable airplane. It is operated reliably, and they give you a vacation package you can’t beat anywhere else.
“They are the only entity that I have never heard a complaint about. Not one. It’s great to have for Grand Forks. It’s a home run. It doesn’t do much for business travelers. But it does put a lot more people through the airport and that’s good. I guarantee people will love it.”
Schuster covers business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107; or send e-mail to rschuster@gfherald.com. Read his business blog at www.areavoices.com/bizbuzz.
—–
To see more of the Grand Forks Herald, or to subscribe to the newspaper, go to http://www.grandforks.com.
Copyright (c) 2008, Grand Forks Herald, N.D.
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
NYSE:LUV, NASDAQ-NMS:JBLU, Toronto:BYD.UN,