What Allegiant’s Airbus A319s will look like. Image from Allegiant.
Today, Allegiant Air has announced that they plan to add 19 Airbus A319s into their fleet.
Allegiant will lease nine A319’s from GE Capital Aviation Services (GECAS) and also lease 10 A319s from Cebu Pacific Air. The first two A319s are expected to start service during the second quarter of 2013.
The aircraft, which will be configured with 156 economy class seats, will not be new and aged seven to ten years old at the time of delivery.
Can Allegiant’s success of a one model fleet, still exist with a fleet of three different aircraft types? Traditionally, Allegiant only flew MD-80 aircraft and more recently added the 757-200. Now, with a third aircraft type, that greatly increases training and maintenance costs. In a presentation given today, Allegiant stated that, “Pilot transition/training -less efficient, but manageable,” and that “Economics dictate this added complexity is worthwhile.”
“The A319 is a new aircraft type for Allegiant, but we otherwise see this as a continuation of our existing business model,” said Andrew C. Levy, Allegiant President. “A319 asset values have significantly declined and now mirror the environment we saw when we first began buying MD-80s.”
Allegiant is hoping to place the A319s on routes that are just marginally profitable for the MD-80 aircraft. The A319 is 25% cheaper per block hour with fuel and 40% lower on maintenance than the MD-80 aircraft. Also, the range of the A319 is greater with a 3,600 nm vs just 1400 nm, allowing Allegiant to look at longer route opportunities. At this time, the airline is not planning on increasing fleet utilization.
The airline is planning to retire two MD-80s, which have heavy maintenance checks coming up, but do not have future retirement plans at this time. By 2015, Allegiant is planning to be operating 56 MD-80s (58 now), six Boeing 757s (four now) and 19 Airbus A319s (0 now).
Buying the A319 is not a fleeting changing plan, but a fleet growth plan. There is no question that Allegiant got a great deal on the A319, since multiple airlines are dumping that smaller model for larger A320 and A321 aircraft. Soon, there will be more A320CEOs in the market, as airlines upgrade to the A320NEO family.
I would not be surprised to see additional A320 family of aircraft join Allegiant’s fleet before 2015. There will be a lot of change with the airline in the next coming years that will test their ability to succeed. I have a feeling that with the demand for rock bottom airfares increasing, they might be able to pull this off.
Horizon and Allegiant sit on the tarmac at BLI. Photo from the Port of Bellingham.
It is always fun when two airlines are able to duke it out at a smaller airport. Alaska Airlines and Allegiant have both been flying out of Bellingham International Airport (BLI) [located just south of the US/Canada border and about an hour and a half north of Seattle, WA] and the competition is about to get… well… more interesting.
BLI has been growing leaps and bounds over the past few years. From being a small regional airline to one that is handling more and more flights. In 2004, the airport saw almost 80,000 passengers and in 2011 that number rose to over 500,000.
Bellingham’s airport is pulling passengers from northern Washington and about 62% of their passengers are from Canada. It seems that both Allegiant and Alaska feel there is more demand, flying passengers to Hawaii.
Last week, Alaska put out a press release, announcing that they would start seasonal service between Bellingham and Maui (OGG) starting in November. This is interesting, since Allegiant previously announced starting non-stop service from BLI to OGG in November as well.
Although both airlines might not be too happy with the added competition, the airport likes providing more options to their passengers.
“The Port is very excited about the new destinations being offered by Alaska Air (Maui), Horizon Air (Portland, OR), Frontier Airlines (Denver, CO) and Allegiant Air (Honolulu and Maui),” Daniel J. Zenk, Director of Aviation at Bellingham International Airport explained to AirlineReporter.com. “Each new destination offers more flexibility and convenience at a low cost to our customers. The Port of Bellingham is proud of our partnership with the airlines and their ability to provide this service.”
Neither airline is willing to call out the other by name, but it is obvious that Alaska knows who they will be competing with. From their press release:
Alaska Airlines’ unique service offers many benefits for customers including:
- Free carry-on bags
- Free advance seat selection
- First class seating
- Complimentary inflight water, soft drinks, coffee and tea
BLI recently opened a new terminal to help handle the increase of service. Photo from the Port of Bellingham.
See, Allegiant charges for carry-on bags, advance seat selection and drinks — they also only offer economy class seating. Even though Allegiant charges for these, the base-price for their flights will also most likely be cheaper and even after you add all the bells and whistles, they might still end up having a cost savings over Alaska.
Obviously, there is much more to choosing an airline than just cost and it will be interesting if cost or service will win out. Heck, there might be enough demand for both to succeed.
Allegiant is used to taking on other airlines and things do not seem any different in Bellingham. “The Allegiant business model is based on low-cost and value that stimulates new demand. This approach has led to 37 consecutive profitable quarters and will continue to help us grow,” Jessica Wheeler, Allegiant’s Public Relations Manager explained via email. “Our service in Bellingham has been very successful, and we are confident that all of our routes out of Bellingham will continue to attract new leisure travelers to our destinations.”
Alaska Airlines will start flying from Bellingham to Maui on November 8th using a Boeing 737-800, leaving at 3:00pm on Mon, Tue, Thu and Saturday. The return flight will be leaving at 11:00am from Maui on Tue, Wed, Fri and Sun. The airline will run the service through to winter until April 14th.
Allegiant will start flying from BLI to OGG on November 14th using a Boeing 757-200. At this point, the airline has not announced an official schedule.
One of Allegiant Air's Boeing 757s (N902NV) while still in Everett, WA.
The journey from rumors that Allegiant Air was to add Boeing 757-200s during the summer 2010 to their fleet to now receiving ETOPS and Flag Carrier Status status from the Federal Aviation Administration has been long.
Last summer, it was a let down for Allegiant, when the FAA gave them authorization to fly the new aircraft type, but they would not give the airline ETOPS certification to fly over the water to Hawaii. Over the past year, Allegiant has been flying a few 757s on routes in the continental US to gain experience. That experience is finally paying off and starting at the end of this month, the airline will start service to Honolulu, followed by Maui in November. Allegiant’s non-stop service plan to Honolulu:
Las Vegas ’“ begins June 29
Fresno, Calif. ’“ begins June 30
Bellingham, Wash. ’“ begins November 15
Monterey, Calif ’“ begins November 16
Eugene, Ore. ’“ begins November 17
Santa Maria, Calif. ’“ begins November 17
Stockton, Calif. ’“ begins November 18
Allegiant will also offer nonstop air service to Maui from:
Bellingham, Wash. ’“ begins November 14
’œThis is an important day for Allegiant,’ Andrew C. Levy, Allegiant Travel Company President, said. ’œObtaining ETOPS and Flag Carrier status not only clears the path for our new service to Hawaii, but also opens up potential international opportunities and will play an important role in our company’s future growth. Our operations team worked long and hard to ensure the completion of this certification and we thank them for their dedication in achieving this important goal.’
Currently, Allegiant operates a fleet of 58 MD-80 aircraft and four Boeing 757-200s. They still have two additional 757s that are being leased. Allegiant plans to put one 757 into service during fourth quarter 2012 and the second first quarter of 2013.
Allegiant is still planning to grow and is looking at other route options. Previously Levy has stated that the airline is looking at the possibility of flying to Canada, Mexico and even South America.
Allegiant MD-80 and Spirit Airbus A319 hanging out in Las Vegas. Photo by Joe (JX).
With Spirit Airlines raising their carry-on fee at the gate to $100 ($35 if you pay ahead of time after November 6th) and Allegiant Air starting to charge for their carry-ons, it has a bunch of people very upset. But why? If an airline comes out with a policy you do not agree on, do not fly them. They will get the message and either change their policies or go out of business. Even though people state they won’t fly either airline, both Allegiant and Spirit continue to grow, so why would they want to reverse their fees?
Yes, I realize that some passengers do not have many choices at their closest airport. However, there is a reason why other airlines are not able or willing to fly into those airports — they can’t make it profitable. So, you are either stuck with an airline that charges fees, one that runs turbo-props or you take the bus.
What interests me are the people that do have a choice, complain about fees, yet continually choose either of the two ultra low-cost carriers.
Being human, most people want their cake and eat it too. Passengers want a first class experience at an ultra low-cost carrier price. Sorry to break it to you — that is not going to happen.
When asked how Spirit Airlines views its fees, Misty Pinson, Director of Spirit Communications, told AirlineReporter.com, “Our ultra low fares with optional add-ons are very consumer friendly. We give customers the opportunity to save money with our low fares and give them the power to choose the extras they want, and they only pay for those they use rather than being forced into paying a higher fare that includes extras that they don’t even want or use.”
Some of you might be rolling your eyes thinking that Spirit is just spinning the fees as a good thing, but Pinson actually gives some good points. If I fly on another airline that might not have as many fees, but I don’t want a soda, I don’t have a bag to check and I am not interested in food, I am still paying for all of those things in my ticket price. Yet airlines, like Spirit, give you the option to pay less overall, if you are not going to use all the options. How is that unfair? Especially when you do all all the fees to the base fare, the overall price still comes under most other airlines.
I also reached out to Allegiant to check in on charging for carry-on bags is going. “Inevitably, when you start to charge for something that used to be free, there will be some people who are vocal about it, but ultimately, we have seen that only about a third of our customers are purchasing overhead bin space when they make their travel reservations online,” Allegiant spokesperson explained over email. “As we unbundle our product and drive down base fares, we are able to stimulate demand and see growth in the number of people who can afford to travel.”
Let’s take a closer look at how both airlines have been doing; comparing the first quarter of 2011 to 2012, both airlines did very well (all data from SEC):
Revenue Passenger Miles (RPM) are up 17.2%
Passenger revenue is up 25.8%
Average fare is up 6.7% to $94.95
Average fare (ancillary revenue) is up 4.2% to $37.75
RPMs are up 18.8%
Passenger revenue is up 17.5%
Average fare per passenger flight segment is down 6.9% to $76.65
Non-ticket revenue per passenger flight segment is up 21.3% to $51.68
That 6.9% decrease is important to note. It indicates that the people who don’t buy anything else are getting a better deal on Spirit flights.
If you were an airline and wanted to make profit (when it comes down to it, that is what every airline wants right?) and you have this business model that makes you profit, while you continue to grow your passenger load, why wouldn’t you do it? There is obviously enough demand for airlines like Allegiant and Spirit to exist with other domestic carriers Southwest, Alaska and Virgin America as well.
Many feel that ultra low-cost carriers have started a race to the bottom for overall experience. I disagree. They have provided a cheaper option for people who care more about getting from point A to point B as cheaply as possible than they do about amenities. If you want to ride in style, you can still pay more to fly in first class on another airline, not have to pay any fees, get more room and even a meal. The “golden-age” style of flying still exists, but it will just cost you much more (like it did in the “good ol days”).
If you are still angry about all those airline fees, it is okay to be angry — just don’t blame the airlines. If you are going to blame anyone, blame those passengers who see them as a better overall deal and create the demand for airlines like Allegiant and Spirit to come along and fill.
Alright, let’s hear it… what do you think of these new/higher airline fees?
A huge thanks to Dan Webb for helping me with these numbers and to Joe (JX) for letting me use his photo.
It will cost you more to bring your carry-ons on your next Allegiant flight. Photo by Jeremy Dwyer-Lindgren.
Allegiant Air has stated that they will start charging for carry-on bags starting Wednesday, April 4th — and no, this is not an April Fools’ joke.
“Allegiant will begin charging for carry-ons for travelers booking new reservations beginning Wednesday (it will go live on our website late Tuesday night PDT),” Jessica Wheeler, Public Relations Manager for Allegiant confirmed to AirlineReporter.com.
Although the airline has not publicly announced the changes, they sent an internal memo to employes. Passengers will be allowed one free personal item (purse, briefcase, laptop), but anything larger will require the carry-on bag fee. Paying for the carry-on at the airport will run you $35, but buying online will save you some money. Allegiant has not confirmed how much the fee will cost if purchased in advance, but inside sources have explained that they expect it to be between $14.99-29.99 — which matches Allegiant’s checked bag fees. The difference in price is route specific and depends on the length of the flight flown.
From Allegiant, this shows how much your bags will cost on upcoming flights. Yes, it is a bit blurry -- you don't need glasses. Image from Allegiant.
This is not a huge surprise, since Allegiant has previously stated that they were considering charging for carry-ons. With the success of Spirit Airline’s carry on fees (Spirit s the only other US-based airline charging for carry-ons), this seemed to be just a matter of time.
Allegiant, based in Las Vegas, is an ultra low cost airline that offers cheap, basic fares and then charge for additional services like seat reservations, boarding order, food and drinks and now carry-ons. This type of ala-cart pricing has been quite controversial, but does allow people traveling light, to travel cheap.
The model of ala-cart pricing and providing additional travel options (hotel, rental cars, etc) has worked out well for Allegiant — they were one of the most profitable airlines in 2011.
Passengers seem to complain about this type of pricing, yet they keep buying tickets. Why wouldn’t airlines look at additional revenue sources like this when they appear to work? If you don’t agree with an airline’s policies, show them with your wallet. Let the complaining begin…