Updated 

Allegiant taking off in another direction


NEW YORK — Las Vegas-based Allegiant Air is expanding its service again, this time with a focus on the East Coast.

The discount airline announced Tuesday that it is adding service to 10 airports, including two on the far edges of the New York metropolitan area. It is also adding flights to Portsmouth, N.H., about an hour north of Boston.

Those markets represent a slight departure for the leisure-focused airline, which mostly flies from small, underserved cities to sunny vacation destinations. Allegiant now will serve 99 airports across the country, two more than Southwest Airlines, the largest domestic carrier. Allegiant generally flies only twice a week to most cities, however, while Southwest has multiple daily flights.

Last year, 7 million passengers took a flight on Allegiant. That is a sliver of the 642 million people who took a domestic flight, including 134 million on Southwest.

Jude Bricker, Allegiant’s senior vice president of planning, noted that some of the cities added are “larger than what we’ve historically been focused on” but that the airline is trying to take advantage of service cuts in the east after the merger of AirTran and Southwest. Most of the new flights will head to Florida.

Allegiant entices people who otherwise wouldn’t fly with low fares and nonstop flights. Then it aggressively pitches them hotels, rental cars, show tickets and other entertainment, earning millions in commissions.

Traditionally, it has focused on Las Vegas, but Bricker said the $2.4 billion, new Terminal 3 at McCarran International Airport has increased the fees the airline pays to fly there by about $600 per flight, or $4 a passenger.

“We have to pass those costs on to the customer,” Bricker said. “We’re still growing in Vegas but just very, very slowly.”

Bricker said the airline isn’t cutting service elsewhere but adding the routes thanks to seven new 177-seat Airbus A320s, which will be in service by year end. Each new plane allows Allegiant to open up four new cities.

The addition of Long Island MacArthur Airport, in Islip, N.Y., and Stewart International Airport, in New Windsor, N.Y., brings the airline closer to the lucrative New York market but still far enough away to avoid the region’s congestion and high prices. The other new cities are Charlottesville, Va.; Clarksburg W.Va.; Concord, N.C.; Oklahoma City; Tulsa, Okla.; Syracuse, N.Y., and Manhattan, Kan.

Other U.S. airlines have struggled over the past decade from the ups and downs of the economy and the price of jet fuel. Allegiant has been profitable for 10 straight years.

Allegiant Air began as a charter operation in 1998 with a single airplane. By early the next year, it had started flights between Fresno, Calif., and Las Vegas. But its business struggled. Less than two years later, it sought bankruptcy status.

Maurice Gallagher Jr., the airline’s major creditor and a founder of ValuJet Airlines, gained control during the reorganization and became CEO.

Gallagher moved the airline from Fresno to Las Vegas, snagged a contract with Harrah’s to provide charter services to its casinos in Laughlin and Reno and started to transform Allegiant into a discount carrier.

The Allegiant business model calls for flying from remote destinations to vacation spots such as Las Vegas.

Passengers face fees for almost every service and amenity. There are fees for checked baggage and changing an itinerary, which are common on many airlines. But the carrier also charges extra to book flights online or to use a credit card. Selecting a seat in advance costs extra, and a bottle of water can fetch $2.

Aggressive pricing helped Allegiant post a net profit of $78 million last year on revenue of $909 million.

Shares of Allegiant Air closed up $1.27, or 1.35 percent, on Tuesday at $95.08.

 

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