Allegiant Offers Dirt-Cheap Hawaii Fares ... but Will They Last?

Last week, Allegiant announced the start of two weekly nonstop flights between Los Angeles and Honolulu, beginning October 30. Although its highly hyped $99 introductory fare is already sold out, Allegiant reportedly still has seats priced at $150 each way. (However, $175 was the lowest I could find for this fall.) Flights operate on Sundays and Thursdays, daytime both ways—no red-eyes. As usual, Allegiant promises travelers can "save even more" by buying hotel, car-rental, and entertainment options along with airfares.

For now, Allegiant's $350 round-trips are about $200 less than round-trip fares advertised by competitive airlines—a big difference even when you factor in Allegiant's many fees. But whether Allegiant can maintain that competitive edge remains to be seen.

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Allegiant's Los Angeles-to-Hawaii flights represent a dramatic departure from its usual business model of two or three weekly flights from lots of "small town America" points to a few big tourist centers. And Allegiant is typically the only airline to fly those routes, which the giant competitors serve only by connections—which run more frequently, but with longer flight times and higher fares.

Los Angeles is hardly a "small town America" origin, however, and the Los Angeles-to-Honolulu route is one of the country's most competitive markets. The giant airlines are in the thick of it, with three daily nonstops each on American, Delta, Hawaiian, and United, some of which also operate as codeshares on Alaska. Moreover, major carriers also fly from Los Angeles directly to Kona, Maui, and Kauai. Allegiant is taking on these giant airlines, and how the bigger carriers react will be a topic of speculation in the industry over the coming weeks.

In the past, when a low-fare airline moved onto a giant airline's market, the biger airline responded in one of two ways: by flooding the market with low-priced seats, or by selectively matching the low-fare airline's prices, at least with some seats, on flights at directly competitive times. Either way, in most cases, the low-fare airline has had to cave and give up the route, often even going out of business.

Will the giants pull those tactics on Allegiant? And if they do, will Allegiant hang on or cave? Or will the bigger airlines just ignore Allegiant's tiny market incursion? Only one outcome is sure: Allegiant is quick to get out of any market in which it isn't making good profits. In the meantime, however, Los Angeles travelers may see some really good airfares to Honolulu this fall—at least for a while. Allegiant's flights are already on sale through its website; the airline does not sell tickets through any online travel agencies.

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