From a comment on the prior post, we may know why Allegiant left ORH. From FlightGlobal.com, please note comments from Allegiant boss from the article below. Ironically our Airport Director Eric Waldron (note February minutes) attended the same conference. Sounds like Mr Gallagher may be speaking about ORH in comment 1 and not ORH in comment 2.
Comment #1 from Mr Gallagher
That new approach must also apply to fuel services. "Fuel is a pain in the ass," says Gallagher, but it represents 40% of Allegiant's expenses. "So I'm in the fuel business." Airports should not "outsource and forget" fuelling services. "A monopoly fueller is a serious competitive handicap. We literally have a number of cities we won't go into because of this. They are not just making a living off us they are making a killing off us, and we are just not going to do it."
Comment #2 from Mr Gallagher
Allegiant Air chief executive Maurice Gallagher revealed at Network plans to add 50 cities over the next five years, including up to five new focus cities. Given Allegiant's unique model of flying where no one else flies, Gallagher's promise should translate into critical business for dozens of small US airports eager to attract more services. Allegiant now operates 68 routes, linking 48 small US cities with three focus cities.
11 comments:
Allegiant is to fresh in the public eye to return any time soon.
I thnk you have to separate out the cost of the fuel itself vs. the all the costs of getting it into Allegiants on board tanks.
Months ago on here when we were tossing around the fuel issue it was brought up someone in the know that airlines buy the fuel in bulk for delivery at certain airports. It's is similar to how electric and gas utilities buy fuel for transmission and distribution through their systems. Take a look at how some elec bills are now broken down into 2 distinct components.....first, the cost of the item itself (elec or gas) and secondly, the cost of getting it to the end user.
Is it Swiss Air's delivery costs that croaked allegiant?
Look at it from Swiss Air's prespective. Is Swiss Air going to ratchet up the price of their delivery services to the point that they drive away their largest ORH customer? Rumored to be 8000 gallons a week? I tend to think not????.......unless it was a case of who was going to blink first?????
this whole fuel thing is starting to make alot of sense in regards to Allegiant leaving ORH.. Take a look at last August's minutes when we must have known Allegiant was unhappy (their last flight was Sept).
Remember there was a vote to remove the local taxation of fuel sold at ORH??
Ok, lets look at this. Allegiant is looking for 50 medium to large cities. Worcester has that (176,200). Although they did leave, they did run a decent service via ORH. Now, they claimed to have left because of fuel, and it is even stated that the fuel is one of the problems keeping the airlines away. How do we fix this??? Find a way to lower the fuel costs, maybe??? I am sure that we could have a shot luring Allegiant back in and making it more successful as the first time around.
.................maybe next time before I post, I should look at what everyone else said first..................my bad
Jahn:
We have no idea how the fuel costs were passed along to Allegiant, maybe that is something we can ask. Obviously the taxation must of fuel by the City of Worocester must have been an issue if the month before they left, the airport commission vote to rescind that vote.
Now based on the CEO of Allegiants comments, I agree with Dave. If somehow we can lower their fuel costs, how ever they are derived then maybe they can come back. I am telling you right now out of all the second tier carriers out there Allegiant gives ORH the best chance of establishing itself.
Lastly although Tim is right, maybe a change in mgmt on 7/1 will entice Allegiant to try again?
Sorry one more thing.. Maybe Allegiant will take another look at ORH after the mgmt change on 7/1 assuming we address the fuel issue to their satisfaction.
Fuel may have been Allegiant's biggest operating cost, but if you factor in other operating expenses like handling charges, de-icing in the winter months, landing fees, ramp fees, and airline ticketing personnel per flight, it probably wasn't economical for Allegiant to operate in the long term.
JJ:
You need to read the entire article. Mr Gallagher addressed some of the other expenses that you mention in your comments. Allegiant feels that they should more or less be charged nothing.
To be hones with you, in the case of ORH, I agree. They should be charged nothing to just help us re-establish ourselves as a market not to mention hit 10,000 passengers which means $1,000,000.
Thanks
Bill
If Swissport, the FBO, has a contract with the City to provide services until some future date, and if their fees for fuel delivery are a problem (or THE problem) how is Massport going to handle this issue?
If fuel croaked Allegiant at ORH, it only follws that fuel will croak other airlines,too???
The City could eliminate the fuel tax (5%??). I thihk we figured the fule tax was running about $500 or $600 per 2000 gallon fillup when the fuel was running about $5.50 a gallon ????
Reading the T&G the last fews days, it sometimes seems The City and it s agencies dont do the necessary follow up work when it comes to contracts. E.g. the historic church on Summer st, City Sq. (demo to start in March '07), and the mess over on Mason St. Anyone taken at look at the mountain they built over there?
Allegiant left because Tony Alfego kept pulling the fire alarm when they were trying to board the plane.
You can find out alot at Twin City
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