Tuesday, December 1, 2009

Is Allegiant Air Feeling the Heat From AirTran?

Allegiant Air, which has long operated exclusively from Orlando Sanford Airport, today announced that ten destinations will now be served from Orlando International Airport.

Normally, we would not consider this to be very interesting news except that we've been following the growth (or dare we say copy-catting) of AirTran from Orlando International Airport (MCO). AirTran has added significant new service over the past several months from MCO which closely follows Allegiant's strategy of operating less than daily (2-4 weekly frequencies) in under-served leisure markets such as Bangor-Orlando, Duluth-Las Vegas and the like. We doubt that AirTran hast been able to build the kind of vacation packaging revenue that Allegiant depends on, but clearly Allegiant decided they needed to compete on more equal terms.

Allegiant is moving markets where they directly or closely compete with AirTran to larger and more conveniently located MCO. These include: Allentown, Knoxville, Lexington and Des Moines where they fly wing-tip to wing-tip with AirTran as well as Greenville, Grand Rapids, Springfield MO, Tri-Cities TN, Huntington WV, and Youngstown where Airtran operates nonstop service to MCO from cities within a very easy drive.

Allegiant's press release says customer preference for MCO drove the decision but we see it really as a way to put pressure on AirTran. And AirTran is pretty good at picking fights - they have proven they can succeed in Delta's back yard in Atlanta and are waging a huge war in Milwaukee with Midwest and now Southwest. Even Northwest, which has a history of not tolerating LCC's in their hubs was not able to drive AirTran from Minneapolis, Detroit and Memphis. This will be fun to watch...

No comments:

Post a Comment