Allegiant's Abandonment Issues

Allegiant, the nation's largest nowhere-to-somewhere airline, abruptly dropped service from five cities: Lafayette, Louisiana; Loveland-Fort Collins, Colorado; Saginaw, Michigan; Salisbury, Maryland; and Wilmington, North Carolina. According to the Transport Workers Union of America (TWU), which represents Allegiant's flight attendants, cancellation of service "took place even though flights were operating at 90 percent capacity or better in many locations." TWU has mounted a campaign chiding Allegiant for failing to live up to its "we'll be there for you" claims; but I suspect the campaign will fall on deaf ears.

I have seen Allegiant's operational style up close at my home airport, Medford Oregon, where I'm on an airport committee to improve air service. Allegiant recently stopped flying from Medford to Oakland, California, and the reasons in that case were clear: Allegiant's business model requires selling not only base airfares but also lots of air-hotel and air-car packages. It would lose money at a load factor of 100 percent if travelers didn't buy enough of those extras.

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In the case of the Oakland flights, many residents of the Medford area have family and friend connections in the Bay Area, and apparently did not buy much in the way of hotel accommodations. Accordingly, the Medford-Oakland flights didn't meet Allegiant's revenue and profit goals, and the flights were dropped. Allegiant hasn't abandoned Medford; it continues to fly from Medford to Las Vegas, Mesa, and Los Angeles, and our airport officials are optimistic about scoring Honolulu flights in the airline's next round of expansion. But it did—and will, in the future—drop any flights that don't meet its targets.

Allegiant has the reputation of acting quickly and dispassionately. It can enter a market quickly and it can—and does—quickly drop an underperforming market. It has already dropped Honolulu flights from Oakland and Santa Maria, which operated for only a few months. My guess is that too many of those customers had access to condos in Hawaii and therefore no need for extras.

Thus, the most likely scenario for the four cities dropped most recently is that travelers who used those flights didn't generate enough hotel and car revenue to meet Allegiant's targets. The airline's allegiance is strictly to its profitability. Unless travelers who fly Allegiant from other smaller cities continue to buy the extras, Allegiant will show them no allegiance, either.

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