LAS VEGAS — While other U.S. airlines have struggled over the past decade from the ups and downs of the economy and the price of jet fuel, Allegiant has been profitable for 10 straight years.
The tiny airline focuses on a niche ignored by other airlines: It only flies from small cities to sunny vacation spots. Allegiant entices people who otherwise wouldn’t fly with low fares and nonstop flights. Then it aggressively pitches them hotels, rental cars, show tickets and other entertainment, earning millions in commissions.
Passengers face fees for almost every service and amenity imaginable. The Las Vegas-based airline charges extra to book flights online, or to use a credit card. Selecting a seat in advance costs $5 to $75 each way, depending on the length of a flight. Even a bottle of water costs $2. While other airlines tout new aircraft with Wi-Fi and TVs in every seat, Allegiant buys old planes to avoid hefty aircraft loans. And to pack in as many passengers as possible, its seats don’t recline. But for small-town Americans with limited flight options, these inconveniences are worth it for a few days of sunshine.
“They could be the worst airline in the world and we’d fly them because we want to go to Vegas,” says Tom Mayo of Cedar Rapids, Iowa, who recently flew there with his family. “It’s our only option.”
Allegiant offers nonstop service from places like Owensboro, Ky., Casper, Wyo. and Appleton, Wis., to popular destinations in Nevada, Florida, Hawaii and Arizona. Allegiant has made Bellingham one of its busier small cities.
The airline flies to Oakland; Mesa, Ariz.; Los Angeles; Las Vegas; San Diego; Reno; Honolulu; Maui; and Palm Springs from Bellingham.
SeaTac-based Alaska Airlines has countered Allegiant in Bellingham with nonstop flights to Honolulu, Maui, Las Vegas, Portand and Seattle where passengers can connect with flights to dozens of other cities.
The low-cost Allegiant has also proposed beginning service to Everett’s Paine Field if Snohomish County expands the terminal to handle airline flights.
Only 17 of Allegiant’s 203 routes are flown nonstop by another airline.
“Typically, the best way to make money is not to compete with somebody,” says Andrew C. Levy, president of Allegiant Travel Co., who sits in a cubicle next to the rest of his staff.
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 a whopping $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.
Allegiant 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 toll-free number.
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.
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 carry-on 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.
“They do a fantastic job packaging,” says JetBlue CEO David Barger. “I think we can learn a lot from what Allegiant does.”Staff writer John Gillie contributed to this report.