Allegiant slashes 18 routes due to Boeing delivery delays
Editor's Note
Ultra-low-cost carrier Allegiant Air is making some big changes to its route network.
The Las Vegas-based airline quietly filed plans to cut 18 routes beginning in the fall, as first seen in Cirium Diio schedules and later confirmed by an airline spokesperson.
The cuts are far-reaching and primarily touch four of the airline's operating bases. The biggest cuts are from Nashville International Airport (BNA), where Allegiant will exit a whopping six routes.
Meanwhile, the second-biggest exit is happening at Los Angeles International Airport (LAX), where Allegiant will slash five routes. After the cuts, Allegiant will be left with just seven routes from Los Angeles.
The full list of affected routes is at the bottom of the post, and you can visualize them below on the map.
Ultra-low-cost carriers have been struggling in recent months as larger U.S. airlines have gotten better at competing with their budget rivals — both in terms of their network and their basic economy product designed to appeal to the most cost-conscious travelers.
Since the beginning of the year, we've seen major network (and policy) adjustments at both Frontier and Spirit — two of the nation's largest budget carriers — as they try to chase travelers wherever they can find them.
Allegiant hasn't historically pursued the same demand as its budget rivals, preferring to target underserved small- and mid-size leisure markets with nonstop service. In fact, Allegiant has gone all-in on this segment with the opening of Sunseeker, a Vegas-style hotel complex near Punta Gorda, Florida.
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The hotel's underperformance was the lowlight of the company's recently announced first-quarter earnings, as it operated at a net loss of $8.8 million with about 40% occupancy.
The airline itself is also struggling to overcome a few big challenges, though. Chief among them is Boeing's delivery delays.
Allegiant expected to receive six Boeing 737 MAX aircraft before July, but it now expects them later this year (at the earliest). Because of these delays, Allegiant has "incurred significant expenses," president Greg Anderson said on the company's most recent earnings call. These costs include pilot training for aircraft that aren't yet in the fleet, as well as "loss of pilot productivity awaiting delivery of the 737 MAX aircraft."
Another cost associated with the delivery delays is this big network downsizing.
"Reduced Boeing delivery expectations will impact our anticipated fourth quarter capacity and in turn our full-year guidance," Drew Wells, Allegiant's chief revenue officer, said in May.
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"We are currently rightsizing our schedule in anticipation of receiving fewer Boeing aircraft in 2024 than initially planned. Despite the Boeing delays, we are confident that we are building out the right path to optimize our flying," Sonya Padgett, director of corporate communications, told TPG on Monday about the cuts.
Of course, it remains to be seen if Allegiant will reenter these markets after it finally receives the aircraft from Boeing, or if it will discontinue service due to other challenges, such as poor demand.
However, Allegiant's business model frequently reduces and ramps up service due to demand and other external market forces. Given that context, it's definitely possible that Allegiant will reenter these markets in the future.
"Once in service and operating at scale, we expect the MAX aircraft will provide a meaningful tailwind to our earnings," Anderson said on the company's earnings call.
Either way, TPG will keep you posted with the latest.
Allegiant's 18 route cuts
- Austin-Bergstrom International Airport (AUS) — Eugene Airport (EUG)
- AUS — Dulles International Airport (IAD)
- AUS — Harry Reid International Airport (LAS)
- AUS — Omaha Eppley Airfield (OMA)
- Nashville International Airport (BNA) — Akron-Canton Airport (CAK)
- BNA — IAD
- BNA — Jacksonville International Airport (JAX)
- BNA — Bozeman Yellowstone International Airport (BZN)
- BNA — Eastern Iowa Airport (CID)
- BNA — Chicago Rockford International Airport (RFD)
- Baltimore/Washington International Thurgood Marshall Airport (BWI) — Sarasota Bradenton International Airport (SRQ)
- LAX — Laredo International Airport (LRD)
- LAX — Rogue Valley International Medford Airport (MFR)
- LAX — OMA
- LAX — RFD
- LAX — EUG
- Destin-Fort Walton Beach Airport (VPS) — Huntington Tri-State Airport (HTS)
- VPS — Rickenbacker International Airport (LCK)
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