Updated 7/21/2010 (below).
What does Allegiant Air have in mind for their upcoming Hawaii service? We’re anxiously awaiting the announcement on which airports they’ll fly to Hawaii from, and that news is expected shortly. I’m also interested if any of their deals will apply to Hawaii residents traveling to the mainland.
Allegiant Airlines’ Director of Marketing, Chris Stacey, came to the islands recently and spoke at the Hawaii Tourism Authority (HTA) conference. His presentation slideshow has now been posted on the HTA website. Here are some of the items I found of most interest and my thoughts on them.
1. Likely Hawaii target markets (expect last minute changes when schedule is released).
- Bakersfield
- Bellingham (Seems certain and opens up the Canadian market)
- Colorado Springs
- Fresno
- Stockton
- Eugene
2. Unique marketing concepts.
- Non-stop flights from local/regional, non-traditional airports.
- Low, low base fares. Allegiant’s fares are currently $70-$80 each way.
- Unbundled “a la carte pricing” (seat assignments, bags, priority boarding, in flight retail, etc.).
- High “voluntary spend” (now $32 per passenger per flight).
- Ancillary sales (hotel, car, and local attractions).
- Minimal or no market competition.
- Closed distribution. 85% of purchases are made on allegiantair.com; no on-line travel agency sales.
- Low flight frequency.
- No frills, leisure/vacation orientation.
3. Hawaii specifics.
- Opaque (Priceline-like) hotel model; property name released after purchase.
- Hawaii is the largest leisure marketing untapped by Allegiant.
- Routes offered have no existing service.
- Minimal flights; some seasonal. I don’t expect to see service more than a few days a week to each destination.
- Sightseeing and attractions to be significant component.
- Increased reliance on ancillary sales for profitability. This may work well given that Hawaii vacations are typically much longer than those to Las Vegas or Orlando.
Update: Winglets ordered
Allegiant Air has just ordered winglets for all of their 757 aircraft in order to reduce lift-induced drag. Winglets will save the airline money and fuel (up to 225,000 gallons per year per plane) and provide for enhanced payload. The winglets also offer “added range capability” of approximately 200 miles to extend the 757’s maximum original range of 3,100 to 3,900 nautical miles. This increases the number origination airport choices from which Allegiant can pick.
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Photo credit: Allegiant Airlines
There is no mention of flying out of Long Beach. That is a major disappointment to all of us living in Southern California. I was so hoping to hear any little hint that Long Beach would be an option. We have the run way, we have enough passengers who just don’t care for LAX. I believe we could sustain enough passengers from this area.
I hope we will be considered a serious alternative.
Aloha, Renee
Wanting to fly to kauai in November. Any chance that allegiant might be flying out of Bellingham for Hawaii by then?
Hi Marguerite,
I really don’t think that Allegiant will be able to start flying that soon. The certification process in order to be able to do perform flights is their first, and is complex. I’ve started hearing that it may even take longer than they previously expected, and will report as soon as there is anything substantive.
Aloha, Jeff
Here is a interesting article in the Las Vegas Sun newspaper today in regards to allegiant’s upcoming Hawaii service.
…”The airline says it will begin flights to and from Hawaii by mid-2011, but details of the new service on six Boeing 757 jets the airline is acquiring are still under wraps.
“If you take a look at the West Coast and from the Rockies west, there are lots of opportunities to fly,” Gallagher said. “Las Vegas is in the mix, but I don’t think we’d start with Las Vegas service because there are already existing nonstops between here and there.”
“The company has high hopes for Hawaii to be like Las Vegas in terms of hotel-room sales and like Florida for rental-car sales production.”…
See the whole article here…
http://www.lasvegassun.com/news/2010/jul/21/allegiant-profit-declines-second-quarter/
Thanks for adding to the conversation Sean.
I shortened the quote in your comments due to potential copyright issues, but the link to the entire article is there.
Aloha, Jeff
The blended winglets add 200 miles of range, increasing the 757’s range from 3100 to 3900 miles? How does that work?
Hi Shane,
The 757’s range is 3100 to 3900 NM, depending on configuration. The winglets claim to add 200 NM.
Aloha, Jeff
Although Vegas is Allegiant’s home base, Allegiant has said several times they will select routes with no current non-stop service (see page 26 in this presentation as well as other Allegiant management presentations at the SEC). LAS already has island service to HNL so LAS would depend upon Allegiant deciding to serve airports other than HNL. Of course, the competitive question is what routes other airlines decide to start flying in the near future too. The possibilities is what makes it all interesting to anticipate.
I think BLI is a given first round route, but I think Stockton and Fresno are likely the other leading contenders to start next year.
Stockton MSA (population 674,860) flights would also pull from the Modesto MSA (510,385) plus parts of southern Sacramento/far eastern Bay Area suburbs. That would be a market over 1.1 million for Stockton/Modesto plus whatever pulls from elsewhere. That additional pull will depend upon what the competition does at SMF and OAK.
Fresno MSA is 915,267 plus the Fresno airport is within 60 miles to Visalia MSA (429,668), Hanford MSA (148,764), Madera MSA (148,632) and most of Merced MSA (245,321 probably split with Stockton service). None of these MSAs have airlines with connections to Hawaii. So over 1.75 million population in the Fresno airport service area.
That is a pretty large population market area to put off for long compared to the size of most of the other options listed. Just seems to me like Fresno might turn out to be a first year market too.
Thanks again Rogo for the well thought out comments.
Definitely Bellingham. Stockton is my bet for what’s next. There’s a lot of regional competition but also very high demand. Fresno is likely too, and perhaps something further south. Seems like there will be at least a third or more location given they have six planes which they’ve indicated are dedicated to Hawaii, but I think they’ll pull a surprise or two. One possibility that comes to mind is Las Vegas, because it is has so much interest for Hawaii, and no one is fulfilling that demand in the way Allegiant might.
As for Las Vegas, they’ve said no, but I’m still not sure it’s a no. Hawaiian does fly, but it is a premium priced route typically, and lacks the packaging Allegiant brings to the picture.
Aloha, Jeff
According to the presentation slides, that should be Fresno not Bakersfield as a possible destination. Bakersfield is on the slide but not highlighted, Fresno is highlighted.
Hi Rogo,
I was just checking to see if anyone was reading. No, seriously, both have been discussed, and yes, Fresno was in the slide. I added it to the post, although frankly, I doubt either will make the first cut.
Thanks.
Jeff