August 23, 2006

Why Allegiant Failed

Over the past two years, we have seen several secondary airports succeed after 9/11 within close to major metropolitan airports:


  1. MidAmerica (http://www.flymidamerica.com) St Louis
  2. Rockford (http://www.flyrfd.com) Chicago
  3. Stewart (http://www.stewartintlairport.com) Upstate
  4. Lebanon (http://www.flyleb.com) Manchester

What did these airports have in common:

  1. Great website
  2. Free Parking (note Stewart charges but they have 4 airlines now)
  3. Free Wireless Internet

Although we recently added wireless internet service at ORH, was it free? I do not know. On the other hand nobody can argue our website was the worst website (http://www.flyworcester.com) of any commercial airport in the US and parking was not free. The website importance can not be underestimated. How do most people buy plane tickets?? I do not have an exact number but I know it is the internet. Look at any of the four website above and now look at Worcester (http://www.flyworcester.com), what message are we delivering? Not a good one.

Free parking should have been our number 1 marketing theme!!!! FREE PARKING -FREE PARKING-FREE PARKING. Billboard should have had "Come to Worcester where the parking is free!!" beneah the promos for Allegiant Air. Instead we disregarded our own application to the DOT for the Small Community Air Service Grant and charge for parking. I will get an update on how much money we have made on the parking but it was only approximately $25,000 in profits for six months. Although $25,000 is alot of money, ORH would have created alot more then this is goodwill and great advertising by offering FREE PARKING, not to mention increased tickets sales to help an Allegiant stay.

Lastly the Small Community Air Service Grant itself, which was rejected the two years previously,that we all worked hard to get resulted in a $455,000 from the FAA two years ago was not spent effectuvely. Initially we had hoped, after the award had been announced, that a "Blue Ribbon Committee" would be created to make sure the monies were spent to not only attract an airline but make sure airlines that we attract sell tickets. In the end the committee was not put together since the airport administration wanted to have the control on how to spend the money. I will get an update on how alll monies were spent but from the June 9th post:

  • 6/10/5 IMG $9,750.00
  • 9/27/5 Event $726.75
  • 10/5 thru 11/5 IMG $39,375.51
  • 10/13/5 Sponsorship Event $500.00
  • 10/26/5 Booth Business Expo $500.00
  • 10/28/5 Event $75.00
  • 10/28/5 Event $112.00
  • 12/14/5 Fliers $920.00
  • 12/16/5 Posters $740.00
  • 12/22/5 Event Decorations $220.75
  • 12/22-27/5 Event Catering $4,732.06
  • 1/2/6 Radio Ad $1,500.00
  • 1/16/6 Printing $1,001,.15
  • Total Spent $60,153.22
  • IMG $49,125,.51

This equates to 81.67% of all the of the total Small Community Air Service Grant award monies was spent on a consultant (IMG). Also there was a new contract signed with IMG for $55,640, which I imagine was also submitted to the DOT. Other cities utilize their Small Community Air Service Grant monies to create their own frequent flier programs in particular Labanon (http://www.flyleb.com/Default.aspx?PageID=4). Although this (an ORH frequent flier program) was not one of our orginal ideas, here were some:

  1. Pay a commission to travel agents on top of the commission that Allegiant pays who book a ticket through ORH. This could have easily been set-up with Allegiant's own on-line ticketing system.
  2. Putting ads on sites like Expedia and Travelocity where when someone in catchment area is looking for a ticket to Orlando, an ad for ORH appears that can link the prospective passenger to our great new web page.
  3. Improve the web page
  4. Install free wireless
  5. Make sure parking will be free
  6. We need to pick one route as the preffered route versus attempting to direct prospective passengers from every single exit off Route 290.

I know hindsight is 20/20 but if things were done differently I honestly believe Allegiant would have achieved greater success and would not be leaving ORH on September 4th.

4 comments:

Anonymous said...

Bill I'm so happy to see someone else point out how big a factor municipal web presence is. That's the front door of marketing for outsiders, has been for years; And the only marketing space with a constantly expanding user base. On every front the city fails when it comes to web presence and you can't succeed at marketing a city or it's services unless every angle is covered and covered well.

We'll find another carrier, it wont come overnight but if we play hard ball and continue to improve the cities image as viewed by outsiders, it'll happen.

Anonymous said...

All good points, Bill. Given the confluence of airline financial pressures and exponentially increasing user savviness with the internet, IATA (International Airport Transport Association) estimates that by 2006, 80% of all passenger transactions will NOT involve traditional ticket counter procedures. Accordingly, the internet and emerging technologies will be essential in virtually ALL airport functions, so the airport better get its act together!!!

Keep the pressure on - can't say the same for Sox Nation this season, but ORH must B E L I E V E...

Anonymous said...

I agree our website was terrible. I flew out of Worcester in Feb and went on to the Sanford Airport website to see where I was flying...Their website was very well constructed and had an abundance of information. On a different note, what do we expect for load factors to only Central Fla? I loved flying from ORH, but I only go to Fla once a year. I do however fly several times a year to other destinations, which I must use BOS for. So a hub destination must be aquired in order to get the high load factors we are looking for.
Thanks for the forum, it's nice to see others that really want our airport to succeed!

Bill Randell said...

Dave:

The leisure flights to Orlando was suppose to entice an airline to bring in daily service to hub; for example, an airport like Rockford was able to re-establish themselves with high loads with leisure flights. Once this happened they then were able to get NorthWest to Detroit (their hub), although it failed.. Undaunted United has been successful with daily flights to their hub in Denver.

My fear is that the Allegiant failure will scare off carriers under the premise if Worcester can not fill Allegiant flights that have great prices, good service and a popular destination a couple times per week--how can Worcester support mulitple flights per day to a hub??