Network 2007: Allegiant makes small airports very happy

Allegiant now links 48 small US cities with three leisure destinations or focus cities - Las Vegas, Orlando and Network 2007 co-host St Petersburg/Clearwater in Florida. It operates a total of 68 routes, most of which are served two to five times per week.

Gallagher says as Allegiant grows it will add up to one new focus city per year. This will likely include its first overseas destination. He says Allegiant is currently studying opportunities in Mexico and the Caribbean but is also looking to add focus cities in the USA including Atlantic City, New Jersey.

Gallagher is proud to say Allegiant intentionally does what other carriers avoid. Allegiant operates routes not served by mainline carriers. It focuses exclusively on the leisure market with few frequencies and relatively large aircraft, Boeing MD-80s, given the small size of the markets it serves.

"We're the only carrier in the last 20 years that broke out of that hub mould," he says. "We've created our own marketplace."

Since taken over as chief executive of Las Vegas-based Allegiant in 2001, Gallagher has grown the carrier from one route. It grew slowly at fist, as Gallagher tested the model, and at the end of 2004 it served 13 cities. In the last two years it has really taken off and Allegiant has racked up 16 consecutive profitable quarters.

But airports interesting in wooing Allegiant, Gallagher says, must be prepared to let Allegiant operate for free and be able to survive entirely non-aeronautical revenues. Allegiant is not interested in short-term incentives but "low permanent costs" he says.

For readers that are interested in learning more about Allegiant's unique business model, Gallagher will be profiled later this month in the web chief executive section of our website.