Allegiant Financials

Found this story in a Lehigh Valley local paper. Interesting points:

• 7.3 million profit in 2005 for Allegiant
• 11.5 million profit first half of 2006 for Allegiant!!!
• Allegiant will serve 50 cities by the end of the month
• Allegiant pays close attention to expenses
• 80% of Allegiant tickets are sold on their website. The importance of a well run website is huge. Take a look at yesterday's blog and the links to the 4 airports listed then look at http://www.flyworcester.com. There is no comparison.

Allegiant must have been losing lots money at ORH, maybe the best thing to do right now is to take a look at the "yield" reports Airport Director Waldron mentioned in the August minutes. Unlike some other second-tier carriers that were not as well run or financially strong (SouthEast, TransMeridian or Hooters), I fear we are going to read alot about Allegiant's IPO and expansion over the next couple of years.

Allegiant goes public
The airline, which is adding a route to St. Petersburg, Fla., from LVIA, also plans to sell its stock.

By Jeanne Bonner Of The Morning Call
Allegiant Air, which confirmed Wednesday it will begin flying to St. Petersburg, Fla., from the Lehigh Valley, is unlike other small, low-cost airlines that have flown here before.One difference is Allegiant is going public. The Las Vegas-based carrier has filed its prospectus with the Securities and Exchange Commission, and plans


A look at the prospectus shows other ways Allegiant differs from airlines such as Southeast Airlines, TransMeridian Airlines and Hooters Air — airlines that have come and gone at Lehigh Valley International Airport.Allegiant company recorded a profit of $7.3 million in 2005, and had net income of $11.5 million for the first six months of the year, up 73 percent from the same period last year.

The company also makes money by bundling its flights with hotel packages and car rentals. It filed for bankruptcy in 2000 and reorganized, with a new business approach, in 2001.The company has targeted small airports that often did not have nonstop service to Florida or Las Vegas before it arrived. That means the airline typically doesn't directly compete with other airlines in its markets. That way, Allegiant intentionally avoids the overcapacity and intense competition at the larger airports.

Like other carriers that have flown to Florida from here, Allegiant targets the leisure travel market, and does not fly every day. Most companies in that niche have razor-thin profit margins, in part because leisure travelers are more sensitive to cost increases than people who fly for business. But the company, which employs about 1,000, appears to be doing a better job at managing costs than some of the other airlines. For example, the company arranges its flight schedule so that the crews sleep in their home cities. That saves the company lodging expenses, Squyres said.

It also charges passengers for minor items such as advance seat assignments. About 80 percent of tickets for its scheduled air service are sold on its Web site.Allegiant officials say the Lehigh Valley is one of its best markets. Indeed, LVIA has the most reservations of any airport Allegiant serves, according to the airline's planning director, Scott Tyra.That's good news for LVIA, which could use a boost. Its passenger traffic declined about 18 percent last year, and has been down every month of this year. Last month, passenger traffic was down about 5 percent.Allegiant will fly four times a week to St. Petersburg beginning Nov. 16. The airline, which will fly Tuesday, Thursday, Saturday and Sunday, will offer fares ranging from $59 one way to about $240. Passengers will typically pay about $79 one way, Squyres said.LVIA is the first of 12 airports Allegiant will name as departure points for service to St. Petersburg-Clearwater International Airport. By the end of the month Allegiant will be operating in 50 cities.

Other airlines that have flown here have expanded rapidly. Within two months of beginning service here, Hooters was flying to four cities from LVIA. In April of this year, less than a year later, Hooters ceased operations.Allegiant's expansion is a concern for George Doughty, LVIA's top official. He has tried to persuade Allegiant to move away from the very small airports it serves so it can increase service here. Right now, the airline does not have enough planes to add even more flights to St. Petersburg, Squyres said.Doughty is pressing Allegiant to introduce flights to other destinations in Florida. Allegiant had considered beginning service to Sarasota, before deciding on St. Petersburg.''We'll take anything to Florida,'' Doughty said Wednesday.LVIA will spend $127,000 to promote Allegiant's flights. The airport provides marketing money to any airline that introduces a new destination. Allegiant has already shot the television advertisement for the new flights; LVIA will pay for air time, Doughty said.Allegiant flew 8,966 passengers to and from LVIA in August, becoming the fourth-busiest airline here.