Midnight Mike
2006-09-21, 06:52 PM
Very Good piece on Allegiant Airlines, their business plan is worked around using MD80 aircraft, very sound business plan....
These are a couple of things that I found interesting:
http://www.nytimes.com/2006/09/21/busin ... f=business (http://www.nytimes.com/2006/09/21/business/21air.html?pagewanted=1&_r=1&ref=business)
Even with its huge fuel bills, Allegiant’s costs are about 15 percent lower than Southwest’s.
Cheap planes and a route network that largely avoids head-to-head competition against bigger airlines have made Allegiant steadily profitable since 2003, a rarity in the business.
The market share of low-cost carriers has doubled since 1998, to about 35 percent, and will keep growing as Southwest, JetBlue and others add planes
Joe Leonard, chairman and chief executive of AirTran, which battles Delta in Atlanta, said Allegiant had “a very workable strategy; I think they’ll do well.”
But paying so little for MD-80’s, Allegiant lets other factors dictate its schedule, flying its aircraft about seven hours a day. To keep labor costs down, it typically flies a plane to and from a city that is no more than four hours from Orlando or Las Vegas. That way, only a single shift of workers is required. It tries to have all the planes back each night in Las Vegas and Orlando, where maintenance is centralized.
These are a couple of things that I found interesting:
http://www.nytimes.com/2006/09/21/busin ... f=business (http://www.nytimes.com/2006/09/21/business/21air.html?pagewanted=1&_r=1&ref=business)
Even with its huge fuel bills, Allegiant’s costs are about 15 percent lower than Southwest’s.
Cheap planes and a route network that largely avoids head-to-head competition against bigger airlines have made Allegiant steadily profitable since 2003, a rarity in the business.
The market share of low-cost carriers has doubled since 1998, to about 35 percent, and will keep growing as Southwest, JetBlue and others add planes
Joe Leonard, chairman and chief executive of AirTran, which battles Delta in Atlanta, said Allegiant had “a very workable strategy; I think they’ll do well.”
But paying so little for MD-80’s, Allegiant lets other factors dictate its schedule, flying its aircraft about seven hours a day. To keep labor costs down, it typically flies a plane to and from a city that is no more than four hours from Orlando or Las Vegas. That way, only a single shift of workers is required. It tries to have all the planes back each night in Las Vegas and Orlando, where maintenance is centralized.