Next possible stop for Allegiant: Wall Street

Allegiant Travel Co. could be making an unexpected stop in New York.

During the Wednesday conference call with Wall Street analysts to discuss third-quarter earnings, company executives said they were looking at bidding on landing slots that will go up for auction at New York's LaGuardia Airport next year. Executives at Allegiant, which operates discount flier Allegiant Air, consider the best airport in metro New York for its proximity to the tourism mecca of Manhattan, but airline traffic has been capped and rationed among the different carriers.

But an opening arose earlier this month, when the U.S. Department of Transportation approved a deal between Delta and US Airways that will put 16 slots, good for eight round trips a day, up for bid.

"New York is the single largest tourism destination in the U.S.," Allegiant President Andrew Levy said in an interview after the call. "It has a huge hotel business with extremely high rates."

This is important to Allegiant because of the fees it collects from travelers who book through its website.

"We are going to serve New York," he added. "It's just a question of when."

However, he added, it would be a way down the list for new destinations except for the auction. Partly because the slots will be sold in bundles instead of individually, "I am not optimistic we will be successful or even bid," he said.

In an unrelated matter, Allegiant raised the prospect that it might build its website into a separate unit that would sell tickets on other airlines in the future. Other airlines allow travelers to book hotels and rental cars even without a plane ticket, but none fill the seats of competitors.

The company has been increasing its online booking capability, but Levy said a decision to sell for other airlines might not happen for a couple of years or more.

In the meantime, the Allegiant must gird itself for new federal regulations that take effect Jan. 24 and will require an entire flight price to be posted up front. The rule also requires allowing passengers a refund within 24 hours of purchase if it comes at least one week before departure. Allegiant now does neither.

The pricing display has caused the most concern, Chairman Maurice Gallagher said, prompting the company to mount a so-far unsuccessful court challenge. Like other airlines, Allegiant displays the fare up front, but not the total including all ancillary fees until the last screen before purchase.

"We are concerned that it is an absolute fare raise, at least visually to the consumer, and they may react accordingly," Gallagher said. "Typically, when fares go up, demand goes the other way."

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.