Higher fuel costs force Allegiant to drop destinations

If you're worried that high gasoline prices will hinder your holiday driving plans, be happy you don't drive a jet.

Near-record prices for oil have sent the cost of jet fuel surging almost 30 percent in the past two months -- and now its taking a toll on Las Vegas travel.

Allegiant Airlines announced it will drop at least six of 42 markets from its Las Vegas route map because the high cost of fuel made the trips unprofitable.

It's the biggest one-time cutback for the airline since it emerged from bankruptcy in 2001 with low-cost, no-frills service between Fresno, Calif., Colorado Springs, Colo., and Las Vegas.

The cuts are the first bad news for the reborn airline that went public in December, had its stock soar more than 30 percent above the initial share price and has consistently added routes.

The markets Allegiant dropped represent its longest-haul flights to Las Vegas, mostly from small cities where service was new and hadn't cultivated a strong customer base.

"Flying empty planes at high fuel costs is not a good business decision," said Tyri Squyres, a spokeswoman for the airline.

Allegiant isn't the only airline cutting back.

In September, US Airways reduced the number of seats into Las Vegas to about 211,000, down from nearly 254,000 in September 2006. And Southwest Airlines last week announced it will scale back its national growth ambitions on a market-by-market basis.

The routes Allegiant dropped were between Las Vegas and Gulfport-Biloxi, Miss.; Huntsville, Ala.; Springfield and Champaign, Ill.; and Lansing, Mich. It also dropped plans to start a new service between Las Vegas and Marion, Ill.

None of the airline's Florida and Arizona routes were affected, nor will any of its approximately 1,400 employees be laid off, Squyres said. The airline will redirect the aircraft for other, more profitable, uses that could include charter service or shorter routes. By the end of the year, Allegiant expects to have about 110 routes.

Based on the lengths of the routes Allegiant chose to cut, the savings should be substantial.

Lansing, Mich., the airline's longest route to Las Vegas, is about 7.75 hours round trip, Squyres said.

One of the airline's MD-80 aircraft burns fuel at a rate of about 1,000 gallons an hour, she said. Since the beginning of the year the fuel cost between Lansing and Las Vegas rose from about $15,300 to nearly $23,300 -- an increase of more than 52 percent.

Airline officials decided against raising fares because they didn't think customers would be willing to pay. Allegiant's core customers are small-town residents taking Las Vegas vacations.

Despite the high cost of fuel, troubled credit markets and a grim housing economy, McCarran International Airport is still expected to log a record number of passenger traffic for the year, approximately 48.1 million arrivals and departures. It would be the fourth consecutive yearly record.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861.