The Commercial Appeal
next to the rest of his staff.
Rather than battle major carriers for customers on routes between major cities, Allegiant uses its marketing muscles to convince people in small towns to fly away for a vacation.
“Allegiant tends to bring people into the airport who wouldn’t normally fly,” says Tim Bradshaw, director of the Eastern Iowa Airport in Cedar Rapids. “It brings people off the couch.”
Last year, 7 million passengers took a flight on Allegiant. That is a sliver of the 642 million people who took a domestic flight last year. But Allegiant earned $11.22 each way from those passengers. On average, the airline industry earned 37 cents each way, per passenger, according to Airlines for America, the industry’s lobbying group. Southwest Airlines, one of the industry’s most profitable carriers, made $3.85 per passenger last year.
Allegiant is ruthless about keeping its costs down. Its employees are some of the lowest paid in the industry, in some cases making $20 an hour less than colleagues at other airlines. It pays cash for airplanes nearly twice as old as everyone else. It only sells directly to vacationers, refusing to pay Expedia, Orbitz or other sites to list its flights.
And if you have a question, it will cost you: the airline doesn’t have a tollfree number.
Like some other budget airlines, Allegiant advertises extremely low base fares and then tacks on nu- merous fees. A roundtrip ticket with Allegiant costs $195, on average. But passengers pay an additional $83 in fees — or 30 percent of the total cost of flying.
To book a trip by phone, Allegiant charges $50 for each roundtrip ticket. To book online costs $20 for each roundtrip ticket. The only way to avoid the fees is to purchase tickets at the airport, something fewer than 3 percent of its customers did last year.
But whether you book by phone, Internet or in person, paying with a credit card costs an extra $8.
Placing a suitcase in an overhead bin is $10 to $25. Boarding passes signify who has paid the fee. If passengers show up at the airport with a large carryon bag and haven’t prepaid the fee, the airline penalizes them an additional $25 to $50, depending on the route.
But what really makes Allegiant different are the commissions it earns from selling hotel rooms, rental cars and other extras including Everglades boat tours and theme-park tickets. It even gets people to attend timeshare sales presentations. Before a passenger can finalize a ticket purchase online, they must click through page after page offering them these add-ons.
Last year, revenue from commissions totaled $36 million, or nearly $12 per roundtrip passenger.
“I don’t think of them as an airline,” says Helane Becker, an airline analyst at Cowen Securities. “I think of them as a travel company The Commercial Appeal contributed to this story.