Allegiant Air sees dollar signs at TCRA

Hank Hayes • Jul 8, 2013 at 11:53 AM

BLOUNTVILLE — Allegiant Air sees dollar signs in small market airports competing with bigger metro airports in a tight yet rebounding economy.

The business model for the Las Vegas-based low-fare carrier, which started offering flights from Tri-Cities Regional Airport to Orlando in 2007, is focused on linking travelers in small cities to leisure destinations.

Allegiant Air, through its parent travel company, offers hotel rooms, rental cars and attraction tickets purchased through the company website: allegiant.com.

“Allegiant consistently goes into new markets and accomplishes two things: We bring down the cost of vacation travel while simultaneously increasing the number of leisure travelers flying,” Rich Winiarski, Allegiant Travel Co. vice president of Marketing, said in a prepared release. “We make more vacations possible by making travel more affordable in the communities we serve.”

Allegiant says it has doubled its ridership since its arrival at TCRA while slashing the average fare in half. In 2008, the airline added flights to Tampa/St. Petersburg. Its jets typically hold 150 seats. Allegiant’s reported average round-trip fares were less than $100.

“(Allegiant flight) load factors typically run in the 90s (percent),” said Melissa Thomas, TCRA director of Marketing and Air Service Development. “May was about 92 percent. In March it was 99.7 percent full. April was 97 percent.” In contrast, American Airlines’ American Eagle unit pulled out of TCRA in 2012 despite its flights to Chicago being close to full.

One negative performance measure has been Allegiant’s on-time record. Last May, Allegiant ranked 28th in on-time performance among North American air carriers with its planes landing on schedule about 74 percent of the time, according to flightstats.com.

But Allegiant continues to grow. While the nation’s five largest airlines have cut their work force, Allegiant and five other low-fare carriers are adding full-time employees, according to the Bureau of Transportation Statistics.

TCRA partners with Allegiant by having airport employees process travelers at the airline’s terminal desk and then transferring their baggage to planes. Flights depart the airport on perceived peak travel days — including Thursday and Sunday.

This year, Allegiant has added Provo, Utah, and Reno, Nev., to its route list. The airline said it expects to operate more than 200 routes by the end of the year.

“Since becoming a public company in December 2006, we have returned over $180 million to shareholders through the purchase of 2.7 million shares for $126 million and two special dividends which totaled $54 million,” the company said in its first quarter report to shareholders.

The report also said Allegiant made $273 million in operating revenue, a 14 percent increase over 2012’s first quarter.

“We are very proud to report our 41st consecutive profitable quarter,” Maurice J. Gallagher Jr., chairman and CEO of Allegiant Travel Co., told shareholders.

Allegiant’s next marketing effort in the Tri-Cities is a “Dodge High Fares” campaign that will include sponsoring a dodge ball tournament on July 14 during Kingsport’s Fun Fest. A portion of the proceeds from registration fees will be donated to local charities.

“We hope people will come out to enjoy the tournament and will take advantage of the opportunity to ‘Dodge High Fares’ by booking with Allegiant the next time they travel to Florida,” Thomas said.

The campaign is expected to include television, radio and print elements and online prize giveaways.

For more about the campaign and dodge ball tournament, go to dodgehighfares.com.

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