Allegiant is plotting major revamp for loyalty program, building on breakneck growth

Allegiant Air has launched dozens of new routes, and has a growing fleet of brand-new planes. Up next, perhaps? A re-imagined loyalty program.

Executives at the budget airline tell TPG they're in the early stages of planning a major revamp for the program known today as Allways Rewards — and the credit card it offers as part of the program.

"We need to take another look at our loyalty program and our cobranded program," Drew Wells, Allegiant chief commercial officer, told TPG in a recent interview at the carrier's Las Vegas headquarters.

Building on a simple program

Allegiant launched its Allways Rewards program just over four years ago, in 2021. A far cry from the complex and far-reaching programs offered by its larger competitors, Allegiant's setup is pretty simple: Members earn 1 point per dollar on bookings, which can be redeemed at a penny apiece.

Essentially, $100 spent with the airline gets you $1 in flight credits you can use to reduce the cost of your next flight.

It's something that Allegiant hopes to build on with a re-imagined program:

"Some elements of traditional programs that everyone is used to today, but also making sure that we're maintaining that flexibility that was built into the [Allegiant Allways] program from its inception," said Altair Dahrouch, Allegiant's director of commercial products, who has been tasked with overseeing the loyalty revamp.

Airlines cash in on loyalty

Since Allegiant launched Allways in late 2021, loyalty programs have become even bigger business for airlines than they were already.

This year, Delta Air Lines figures to make more than $7 billion from its credit card partnership with American Express. And loyalty was perhaps the most-anticipated aspect of the biggest U.S. airline merger in recent years between Alaska Airlines and Hawaiian Airlines, which last month culminated in the reveal of Atmos Rewards.

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Allegiant, of course, is nothing like Delta — or Alaska or Hawaiian, for that matter (even if it is mulling inflight Wi-Fi for its planes).

The airline is known for flying travelers between underserved cities and vacation destinations, from Orlando to Punta Gorda, Florida, and new favorite Gulf Shores, Alabama.

It expected to make a far more modest $140 million through its cobranded credit card program, executives shared in January.

Many of its passengers fly only a few times each year — a fact that loomed large when the carrier first launched what was essentially a cash back loyalty program, once dubbed the "first airline loyalty program designed specifically for leisure travelers."

Yet, the airline also boasts a loyal following, especially in small- and medium-sized U.S. cities that saw marked reductions in commercial air service during (and after) the COVID-19 pandemic.

"There are so many cities where we are either the biggest [airline] in town, or perhaps the only game in town. And there's a very compelling reason for those customers … to interact with us at a deeper level," Wells said. "There's more we can do to unlock that."

What could an Allegiant Allways Rewards shakeup mean?

While the carrier did not offer clues into how it's considering updating Allegiant Allways, it's worth noting the current program doesn't offer any sort of status tiers. It also doesn't offer a way to translate frequent flying (or card spending) into free seats in its extra-legroom Allegiant Extra product expanded across its fleet in recent years.

Compare that to budget competitor Frontier Airlines, which this year aimed to encourage flying and card-spending loyalty by rolling out a new companion pass for high-level elites — and first-class upgrades that are expected launch in conjunction with new premium seats later this year.

"There's a lot more that we can do for more of the subsets of our customers," Wells said. "The ball's back in our court."

Related reading:

• The best airline credit cards
• What exactly are airline miles, anyway?
• 6 real-life strategies you can use when your flight is canceled or delayed
• Maximize your airfare: The best credit cards for booking flights
• The best credit cards to reach elite status
• What are points and miles worth? TPG's monthly valuations