March 30, 2006

Allegiant's Bankruptcy

For all of those bemoaning the fact that we were in negotiations with Hooters, let us not forget that Allegiant Airlines reogranized under Chapter 11 bankruptcy protection from 2000 to 2002.. Again citing my ValueJet example when their plane crashed in the Everglades, many industry experts thought they would never make it. Today they are Airtran.

We need to talk to any airline that we can offer them discounts on overhead (landing fees, free rent, etc) and matching advertising dollars, but we need to stay clear of any revenue guarantees. Many smaller airports end up owing millions with the types of deals.

2 comments:

Ytown Fan said...

Problem is that's when Gallagher invested the cash to get it out of bankruptcy.

He was apart of the valujet corp. and then when that disaster occured waited for his moment and helped buy majority of Allegiant Air.

Bill Randell said...

YNG:

My point is that just because an airline is in trouble, facing bankruptcy, etc does not mean we should not have negotiations. Airlines like Allegiant and ValuJet have turned it around.

In other words I see no problem that we were talking to Hooters. In fact our $100,000 study from IMG recommended Hooters as one of the six airlines that we should talk with.