Allegiant Air's Success Comes With No Frills
Allegiant Air has some of the lowest fare prices in the industry: A ticket from Pennsylvania to Florida, for example, can run as low as $29 one-way. That price assumes you don't need to check a bag, choose your seat, board first or fly from a major airport hub.
Allegiant flies from 65 airports, in places such as Fargo, N.D.; Allentown, Pa.; and Roanoke, Va. Managing Director Ponder Harrison says that avoiding places other airlines fly is part of the Allegiant's business plan, as is pulling out of a market if it stops making money. The airline also charges fees for baggage, seat designation and other add-ons for customers who do not want the complete no-frills experience.
"Part of the thesis was to enter markets in small-town America and take those customers to what we term 'world-class leisure destinations,' really places people want to go," Harrison says.
Those leisure destinations include Las Vegas, Orlando and Phoenix. The airline's Web site doesn't even have a button saying "book a flight." It says "book a vacation." Allegiant also does not book tickets through Orbitz, Expedia or other travel brokers. The only way to get a ticket is directly through the airline.
Allegiant has turned a profit for 24 straight quarters.
"Allegiant is a little version of what Southwest was 25 years ago," says independent aviation analyst Hubert Horan.
But Horan says Southwest has gotten so big that it's more than a bit like every other airline. It lost $91 million in the first quarter of 2009.
If Allegiant stays with its current model, it might remain one of the few success stories in the troubled airline business.
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STEVE INSKEEP, host:
Now, while NPR's Ted Robbins was in Las Vegas, he visited an airline that's ready to fly you there right now, and cheap - although not if you're in Los Angeles or New York or Chicago. To fly Allegiant, you have to be in places like Peoria, Shreveport or Bismarck.
TED ROBBINS: The best way to learn about Allegiant Air is to book a flight. No Orbitz, Expedia or Travelocity. Like Southwest Airlines, the only way to buy a ticket is on its Web site, or over the phone with one of its customer service reps at Allegiant Headquarters in Las Vegas.
Unidentified Woman #1 (Allegiant Air): I have you now Saturday, May 2nd, leaving Fargo at 6:45 p.m., Flight 653 arriving in Phoenix Mesa Gateway at 7:50 p.m.
ROBBINS: Allegiant flies from 65 airports, places like Fargo, Allentown and Roanoke. Managing director Ponder Harrison says the airline's business plan includes avoiding places other airlines fly, and pulling out of a market as soon as it stops making money.
Mr. PONDER HARRISON (Allegiant Airline): Part of the thesis was to enter markets in small-town America, take those customers to what we term world-class leisure destinations, really places people want to go.
ROBBINS: Vacation spots like Las Vegas, Orlando and Phoenix. The Web site doesn't even have a button saying, book a flight. It says, book a vacation.
Unidentified Woman #2 (Allegiant Air): I have the Sahara, the Tropicana, the Excalibur, the Trump…
Mr. HARRISON: The airline is really a delivery mechanism. It's a means to an end. And most airlines stop right there. We're probably a very large wholesaler of hotel rooms in the Las Vegas market. We sell shows, tours, tickets.
ROBBINS: And forget three flights a day to anywhere - Allentown to Tampa-St. Pete, three times a week, no half-filled planes.
Mr. HARRISON: Over-capacity means airplanes are flying when there's no demand for those flights. We believe that you can't fly - I mean, you can; you're just not going to make money doing it. So we prefer to only fly when customers want to pay us.
ROBBINS: Customers pay among the lowest prices in the industry. A ticket on that same Allentown to Tampa-St. Pete flight is as low as $29 one way. But check a bag, $30; choose your seat, $14; board first, $5. That option, you have to unclick to avoid.
Critics say Allegiant nickel and dimes its customers. The company admits it, but independent aviation analyst Hubert Horan says passengers can still come out ahead.
Mr. HUBERT HORAN (Aviation Analyst): It's not as if Allegiant is advertising a price that looks like a bargain and then when you add in everything else, it's just as high as if you'd flown Delta. Even after you get the reserve seat assignments and whatnot you might like, it's still quite a good bargain for those customers.
ROBBINS: And Allegiant has turned a profit for 24 straight quarters.
Mr. HORAN: Allegiant is a little version of what Southwest was 25 years ago.
ROBBINS: But Horan says Southwest has gotten so big, it's more than a little bit like every other airline. It lost $91 million in the first quarter of this year.
If Allegiant stays with its model, it might remain one of the few success stories in the troubled airline business.
Ted Robbins, NPR News.
INSKEEP: We've been asking listeners this week to tell us what they'd like to see to make flying better in this country. Go to our Web site, npr.org, to voice your opinion about what should be in a passengers bill of rights. Transcript provided by NPR, Copyright National Public Radio.
