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Allegiant Airlines: Is there a market for a European Allegiant?

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Allegiant Airlines

Allegiant Airlines is one of North American aviation’s most under-reported success stories. The airline flies to a select number of popular vacation hubs from several relatively remote and seriously underserved destinations across the United States.

Allegiant’s model is genius. It is the only vacation destination player at most of its traffic-starved airports. For residents of many of the catchment areas associated with these far-flung airports, Allegiant offers a cheaper and simpler way to get to popular holiday destinations.

A different kind of budget airline

Allegiant’s model has been quite successful, with the airline growing impressively over the last several years. In March 2010—the most recent month for which statistics are available—the airline saw a traffic increase of 16.4 percent over the previous March. Its load factor grew as well, though less dramatically, from 92.3 percent to 92.9 percent.

Charisse Jones pointed out in a USA Today article late last year that of the airline’s 135+ routes, it faces competition on just five. While this competition-averse strategy may advertise Allegiant’s vulnerability to more powerful airlines, the airline also has enormous room to grow. According to Jones, the airline has identified over 300 potential routes for future development.

Because Allegiant is focused on linking underserved airports with prime holiday destinations, it does not fly to many of the country’s biggest airports. New York’s three airports and Chicago’s two airports take no traffic from Allegiant, and neither do Miami, Atlanta or Houston. The only major airports Allegiant serves are Las Vegas, Los Angeles and Orlando, and all three are big hubs for the airline.

The Luck of Bismarck and Grand Island

Let’s gauge the impact of Allegiant on two markets.

Take Bismarck, North Dakota. Allegiant flies between Bismarck and Las Vegas and Phoenix-Mesa. The other airlines flying to and from Bismarck are Delta (to Minneapolis) and United (to Chicago and Denver). The routes flown by Delta and United are business routes, while Allegiant’s are leisure routes.

Or look at Grand Island, Nebraska, home to the Central Nebraska Regional Airport. Allegiant flies twice a week from Grand Island to Las Vegas and twice a week to Phoenix-Mesa. The only other airline flying to Grand Island is Great Lakes Airlines, which operates a route to Denver. Again, the Great Lakes link is a business route, while Allegiant’s routes are for holiday travelers.

For North Dakotans, Nebraskans and residents of many other states and regions, Allegiant makes air travel to popular vacation destinations easier, cheaper and far simpler than it would otherwise be.

An Allegiant for Europe?

The United States and Europe have very different transportation infrastructures and vacation allotments. For these reasons among others, it is difficult to imagine a precise mirror for Allegiant within the context of Europe.

These differences acknowledged, an Allegiant analogue for Europe—let’s call our new fantasy airline Euro-Allegiant—might fly from places like Aalborg, Leipzig-Altenburg, Lille, Lviv, Kaliningrad, Kuopio, and Wroclaw to holiday destinations like Chania, Fuerteventura, Larnaca, Luxor, Madeira, Monastir and Paphos.

Unlike Ryanair, which connects secondary, often minor airports to multiple destinations, Euro-Allegiant would link its far-flung airports to a limited number of vacation hubs. Euro-Allegiant would start small, fill in the gaps, link up otherwise unpaired destinations, dissolve routes if and when bigger airlines decided to move in and possibly even absorb local charter flight arrangements.

Would this model work in Europe? With some modifications, it just might.

About the author

Alex Robertson Textor

About the author: Alex Robertson Textor is a London-based travel writer and editor. He has written for Rough Guides, the New York Times, and Public Books, among other publications; he also guided the tablet magazine Travel by Handstand to two SATW Foundation Lowell Thomas Travel Journalism awards. With Pam Mandel, he writes copy and generates ideas as White Shoe Travel Content. He is on Twitter as @textorian and maintains his own blog, www.alexrobertsontextor.com.

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3 Responses to “Allegiant Airlines: Is there a market for a European Allegiant?”

Missouri to Baden-Baden says:

Is it refreshing or frightening that an airline’s entire 2011 business plan can be summed up in sentence? Thanks for clearing the air(lines) again, Alex Robertson Textor!

Really good point, Alex, though I would say that Europe already has precisely this kind of airline. Pegasus, Thomson and Monarch all hold places in the top 40 list of European airlines, yet they are carriers which are perhaps little known outside the particular markets in which they operate – and those markets tend to be rather similar to the Allegiant model. Indeed, when WestJet Express (as it then was) rebranded as Allegiant, the company quite specifically said it wanted to pursue a European holiday charter style route development model.

Examples of Thomson routes include Norwich to Corfu, Exeter to Lanzerote or Paphos, Aberdeen or Durham Tees Valley to Majorca. Pegasus routes include Billund to Izmir and Erfurt to Antalya. Monarch routes include Luton to Bodrum, Dalaman and Larnaca. So thus linking lesser known (or cheaper-to-use) north European airports with holiday sunspots in southern Europe, the Canaries or Turkey.

All three airlines sell a good proportion of their seats as part of all inclusive flop-and-drop packages, in just the same way that Allegiant carries many passengers who are traveling as part of a package sold through Allegiant Vacations.

We should not underestimate the market power of these niche airlines. In terms of weekly scheduled seat capacity at European airports for the current summer 2010 timetables, Pegasus outranks British Midland (bmi), Olympic, LOT, Delta, Emirates and many other airlines that we might think of as having a more established position in European markets.

Nicky Gardner
co-editor
hidden europe magazine

Nicky, thanks for your comment. Indeed, there is a common strategy shared by Allegiant and the European carriers you mention, most of which—correct me if I’m wrong—link a “home” market (with Monarch and Thomson, for example, the UK) with “holiday” destinations. My review of Allegiant made me think of a potential European airline that might link multiple national markets to “holiday” destinations, an airline model that I believe does not currently exist in Europe. But point well taken, especially given the fact that Allegiant modeled itself on a European charter airline template. I didn’t know that, and it certainly makes sense.

Alex

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