August 22, 2006

Allegiant Pulls Out of ORH!!

Effective September 4th!!! This from the Telegram:


WORCESTER— The only commercial airline serving Worcester Regional Airport is leaving. Allegiant Air, which began flights to Orlando Sanford International Airport in Florida last December, has told City Manager Michael V. O’Brien that escalating fuel costs forced them to stop service.The last flight will leave Worcester Sept. 3, the city manager said this evening.Airline officials have assured Mr. O’Brien that refunds or tickets with other airlines will be offered to those holding tickets after that date.The city manager said he is “down but not daunted” by the decision. He said the city continues discussions with several airlines that have expressed an interest in Worcester.


I have been worried about the low loads the past couple of months... In light of the problems in Boston, I half expected not only for the flights to be at 100% load, but for Allegiant to add flights. By looking at the on-line reservation system and the availabilty of seats (since the airport administration would not release the numbers), one could tell that this obviously was not happening. Allegiant, unlike our airport administration, are good businessmen who run a good operation and are not in business to lose money.

The numbers were not there, plain and simple. Other cities, in particular Lehigh Valley, which have the same escalating fuel costs announced ironically enough yesterday an expansion of service to five times per week during the month of January.
(http://www.nj.com/business/expresstimes/index.ssf?/base/business-0/115630592469980.xml&coll=2)
Is Allegiant pulling out of any other cities? As of today Worcester is the only one. If the numbers were there, all Allegiant had to do was raise the ticket costs like all the other airlines are doing. On the other hand if the numbers are not there, raising the ticket costs does not help.

Although I am not surprised, I am also quite disappointed and realize that this is a huge blow to ORH trying to recruit other airlines. Allegiant, unlike PanAm for example, is a great airline targeting secondary cities with a track history of suceeding at airports like Worcester, in an expansion mode raising money on Wall Street for an IPO while looking to add a 2nd Florida destination. The fact Allegiant has been forced to stop service sends a very loud clear message out to other carriers that no study or consultant can spin. If you were a strategic flight planner for a start-up like Festival Airlines or a more established business like a USA3000, with a similar business plan as Allegiant, would you come to Worcester.

General Aviation Airport here we come. Please please sell ORH to MASSPORT!!!

12 comments:

Anonymous said...

This is a disgrace. City management and airport administration did nothing to help Allegiant succeed in Worcester. There will be no other airlines interested in us based upon our track record alone.
How in the world can our City Manager possibly believe other airlines will take a chance on Worcester.
Complete incompetence - there are no excuses for this.

Bill Randell said...

Dave, Disgusted and Others:

The key here is that we need to watch what other cities Allegiant discontinues service due to "high fuel cost". The guys/gals, who run Allegiant are smart/provide great service at great prices only stop service because they are not selling tickets!!! If ORH is the only one cancelled by Allegiant, what does that say?? We can not sell tickets!!

My other question is that Allegiant must have warned City Officials that they were not happy with the sales at ORH and that they may discontinue service. How could this not have been passed on to the tax-payers?? Instead we were told, not more then a month ago when the 10,000 tickets outbound was sold, how happy Allegiant was???

I still believe the airport can be a success, but I only hope that anyone who still thinks the status quo should continue will finally realize it should not from this latest Allegiant escapade.

Bill Randell said...

Just read my last comment..

When I say "escapade", this is no reflection on Allegiant. I think they did everything that we expected from them and that they promised.

When I say City Officials, I specifically mean the people who run the airport.

Anonymous said...

Wow Guys. Was on airliners.net and figured this was just temporary for September like Youngstown's is. Well I was wrong.

I feel real bad for you guys. I hope you can get someone in here quickly to retain this route.

Sorry again.....

Bill Randell said...

Dave:

One destination hurt, but it was suppose to be a first step. Problem is we never got to the 2nd step.

Actually remember being at the press conference at ORH announcing Allegiant and Andy Lacombe interviewed Tim MacDonald and myself. We both told him how great Allegiant was but we needed to get more airlines.

It never happened. Where is IMG?

Anonymous said...

Question about fuel costs.. What does ORH charge for fuel costs, compared to other cities?

Anonymous said...

SWISSPORT charges an arm and a leg for fuel, both 100LL and Jet A. The manager there considers Logan and TF Green to be the direct competition and sets his prices accordingly at $5.35 for 100LL and $5.27 for Jet A. Bear in mind that the fuel uplift for a routine Allegiant flight is TWO THOUSAND GALLONS. On airnav.com and other pilot sites, you can find pilots advising others to buy fuel somewhere else because Worcester jacks you for it so badly.

Allegiant I believe recieved a slight discount, but just like with GA pilots, it's a pittance.

As long as Swissport is the FBO on Worcester's field, they will continue to chase business of all varieties out of the airport. They have no long-term vision - it's all about scalping whoever you can in the immediate time, rather than pricing fuel and ramp fees APPROPRIATELY to garner return business instead of a bad reputation. They don't care who they screw or who it affects.

In the late 90's there was a months-long waiting list for GA tiedown, packed t-hangars and busy community hangars. Now it's a goddamn ghost town, and the blame lays squarely on Swissport. Allegiant isn't all their fault but they sure as hell helped.

Anonymous said...

Co Pilot:

2000 gals @ $5.25 per gallon = $10,500 for fuel per flight.

If Allegiants MD-80 carries 130 passengers and the ORH average load factor is 80% (rounded)...then 80% x 130 passengers = 104 passengers x $80 per ticket (most recent price?) = $10,400.

So bottom line:

Fuel expense 10,500

Per flight revenue 10,400

So Allegiant this leaves $100 in the red before ALL the other flight related expenses!

What did fuel cost per gallon back in Dec 2005 when allegiant signed on at ORH?

Anonymous said...

Correction: That 10,400 revenue per flight s/b 11,200 which still only leaves $700 toward all other flight costs.

Always proof before hitting send !!!!!!!

Bill Randell said...

jahn:

more like 75% not 80%.

Anonymous said...

Swissport generally raises prices in winter since there is less traffic. I don't remember what the price was but I could probably find out - I think I wrote it down at one point.

Most major airlines buy fuel on the open market and then pay to store it at their airports, but I remember there being negotiations on price, so I think Swissport was involved. It was a somewhat contentious issue, if I remember correctly. Let me poke around and see what I can dig up...I think I can get some more firm numbers here.

In all fairness, the ridiculous gas prices on the field are more of an issue for general aviation pilots, but they factored here for sure.

Anonymous said...

Ask Allegiant about de-icing charges. Swissport's deicing trucks had no gauges to accurately read how much deicing fluid was dispensed. Swissport dispatchers charged illegals "guestimates"at the Manager's request.
Aviation is a small world . This is one of the reasons pilots dislike Worcester Airport