As I See It

In case anyone missed the "As I See It" on page 13 of today's paper. Maurice Gallagher, President and CEO, of Allegiant Air wrote the following letter.

http://www.telegram.com/apps/pbcs.dll/article?AID=/20060901/NEWS/609010432/1054/OPINION

Allegiant’s early exit: It’s just a matter of economic realities

In the past week, several articles have appeared in this newspaper disparaging Allegiant Air for our decision to discontinue air service to Worcester. Local politicians have been among the most vocal critics. One politician was quoted questioning my personal integrity while categorizing me as “an example of the charlatans that exist in the corporate world.” A simple truth underlies the events of the past week: Corporations must generate profits or they die. This is both a fact as well as the catalyst for our nation’s economic prosperity. Allegiant Air would never categorically commit to any market for the “long term” without regard to economic performance. That said, Allegiant would also never intentionally enter a new market expecting it to fail.

The airline industry is littered with the carcasses of companies run by management teams that were afraid to make difficult decisions about markets unable to economically sustain profitable air service. This is not to say that Worcester would be unprofitable for another airline with different criteria for acceptable economics. However, at Allegiant, all markets we serve must either stand profitably on their own or at least show a clear trend toward profitability. Worcester did not meet either of these criteria. Allegiant does not fault anyone in particular for this result. To the contrary, we believe local Worcester officials performed to their best of their abilities to provide the community with affordable nonstop air service to Orlando. Similarly Allegiant Air management believes it is acting to the best of our abilities in making a straightforward business decision to eliminate future losses at Worcester.

To summarize: In our view the market has spoken; it does not support Allegiant Air service at Worcester at a level necessary to sustain profitability. We sincerely believed Worcester would be a good market for Allegiant Air, but we were wrong. We hope Worcester finds another airline for which it is a good market, we thank those of the Worcester community who flew us during the past year and we wish the Worcester community the best.