Exactly one week before Thanksgiving, Allegiant Air dispatched e-mails to customers stating it would no longer provide flight service from Gulfport-Biloxi to Las Vegas, indicating the discount airline’s last flight between the two points was December 10.
“The primary reason for this cancellation of flights is straightforward: the soaring price of oil,” read the e-mail. “We sincerely apologize for any inconvenience this decision may cause you.”
Allegiant Air customers, many of whom had made holiday plans surrounding Christmas and New Year’s, were given two options — change reservations to fly by December 10 or cancel for a full refund. Allegiant Air provides service between the two airports every Monday and Friday. According to the www.AllegiantAir.com Web site, flights on December 3, 7 and 10 were listed at $49 each way. Seat assignments are $11 per flight. Checked baggage costs $10 each.
“The Las Vegas flight was the only one Allegiant cancelled from our airport,” said Kristi Bennett, marketing director for Gulfport-Biloxi Regional Airport. “Allegiant pulled six of their longest flights because of rising fuel costs. They looked at their system and picked the Gulfport-Biloxi flight to Las Vegas because it was one of the longest in their entire system at three and a half hours long. It naturally fit their low-fare business model to drop it.”
Allegiant Travel Company (NASDAQ: ALGT), parent company of Allegiant Air and Allegiant Vacations, announced unaudited third quarter 2007 (3Q07) financial results October 29, showing a healthy 41.7% increase in total operating revenue (from $60.9 to $86.3 million) and a robust 230.1% increase in operating income (from $2.9 to $9.5 million) over 3Q06.
“Our results in the third quarter, historically our weakest, remain in line with our expectations,” said Maurice Gallagher, chairman, CEO and president of Allegiant Travel Company. “We more than doubled our operating margin to 11% despite substantial growth. Year-over-year scheduled service passengers increased 57%, while scheduled service departures and ASMs were up 44% and 35%, respectively. Notwithstanding these growth rates, our terrific team members produced an excellent on-time operation in the third quarter with 85% of our scheduled service flights, excluding ATC and weather, departing within 15 minutes of schedule departure and a 100% complete rate on scheduled flights.”
So why did the airline carrier decide not to raise rates to offset rising fuel costs, since almost every flight between Gulfport-Biloxi and Las Vegas was near capacity? “That’s a good question,” said Bennett. “At points, they did slowly increase (rates), but they’d drop down to offer Web specials. I don’t know why increasing wasn’t an option to continue service.” Repeated calls to the airline were not returned by press time.
Allegiant’s 3Q07 results were based on 42 routes to Las Vegas, 24 routes to Orlando, 14 routes to Tampa Bay/St. Petersburg and seven routes to Phoenix-Mesa. Last year, the airline served only 34 routes to Las Vegas and 15 routes to Orlando.
On October 16, Allegiant inked a two-year contract, beginning January 1, 2008, to base MD-80 aircraft in Tunica to operate fixed-fee services “at Harrah’s direction” from cities around the U.S. to Tunica, Gulfport-Biloxi, New Orleans, Shreveport, La., St. Louis, Mo., and Council Bluffs, Iowa.
Allegiant Air will continue non-stop service between Gulfport-Biloxi and Orlando/Sanford.
“The Vegas flight being pulled was the only bad news we’ve had lately,” said Bennett. “We’ve had so much good news with announcing non-stop service to Columbus, Ohio, and Greensboro, N.C., via Skybus, American Eagle via Chicago-O’Hare and St. Petersburg/Clearwater, Fla. Myrtle Beach (S.C.) is right there.”
According to a recent survey of local business leaders, Chicago was the Mississippi Gulf Coast’s most-wanted market for direct service, Bennett said.
“Shortly after, we announced the Chicago service,” said Bennett. “Columbus was No. 5 on the list of low-cost carriers they’d like to see serving this area, and that worked out. We were also in the mix in the Carolinas. It’s all had a ricochet effect. Airlines have seen the growth happening here and are jumping on it.”
Even though Allegiant Air offered the only non-stop service from Gulfport-Biloxi to Las Vegas, travelers may connect on one-stop flights through Dallas on American Airlines or Houston via Continental Airlines, said Benne
Contact MBJ contributing writer Lynne W. Jeter at Lynne.Jeter@gmail.com.tt.