Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Leeham News and Analysis
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
- A350-1000 or 777-9? Part 2 April 11, 2024
- Pontifications: Boeing “transparency”–not so much. April 9, 2024
Allegiant Air sees starting commercial service at Paine Field by the fall
Allegiant Air, a discount carrier that serves Bellingham and other cities in Washington, and which started the studies for commercial aviation service for Paine Field in Everett (WA), said it sees starting air service at Paine Field this fall. “We’re in negotiations now. The first opportunity is in the fall,” says Jude Bricker, VP of Allegiant, who made the announcement at the PNAA conference.
Other stuff:
- Allegiant serves a half dozen cities from Bellingham, including Phoenix, Las Vegas and two cities in Hawaii with 15 flights a week.
- I am as bullish today about the business as ever. Will see real rationalization come to the space. Capacity will be rationalized. There is more ability to pass on higher costs.
- Allegiant serves about 200 markets. Scheduling is done for price. Thursday into Vegas, Sunday out. We don’t fly anything on Tuesday.
- We unbundle product because people who fly Allegiant are extremely elastic as to fares.
- $1.5bn market cap at $78 stock price.
- We schedule by week, by market. We always ask ourselves, what is the least crappy thing we can do with this airplane?
- Roughly we don’t make any money on air fares. We would lose money selling only fares. Ancillary revenue is the profit base.
It is about time, to provide the many visitors and business people who need
to visit the Boeing Everett plant and areas around it, with direct access and
save them the hour+ drive thru Seattle, from SeaTac airport.
Faa looking at fiber contamination on the cause of the fire on the 787.
A significant portion of Allegiant’s business in Bellingham is actually from Vancouver. But its not simply “stealing customers” from YVR, rather its drawing its customers from people who would not necessarily fly at all at the current prices. They are offering a lower cost alternative to any canadian airlines (low cost or not) which have to pay taxes and gate fees to operate from a Canadian Airport. Thus its carved out its market segment from nothing, which is pretty impressive.
In a way, the market dynamics for this portion of their client base might be more stable than it seems; rising fare prices would presumably be mirrored in the Canadian market, which means that allegiant will be able to count on a substantial segment of the market. The real threat is if the Government of Canada decides to cut fees and taxes on airports, which various industry groups and other parties have been lobbying for.
The question then remains, is moving to Paine field an effort to diversify away from the Canadian client base.