Allegiant Air has provided a positive signal for domestic demand in the USA as the airline industry braces for the impact of recent economic turmoil on consumer behaviour.
Notably, Allegiant’s operational statistics provide a snapshot of air traffic volumes prior to the USA’s introduction of steep tariffs on most of the world’s countries on 2 April.
Allegiant Travel Company, parent of the Las Vegas-based ultra-low-cost carrier (ULCC), released on 21 April preliminary traffic results for March, showing a 14% increase in total passenger volume over the same month of 2024.
The airline operated 21% more flights year-on-year in March, while its passenger capacity as measured in available seat kilometres (ASKs) increased by about the same percentage.
During the year’s first three months, Allegiant’s ASKs were up about 14% compared with the first quarter of 2024, as were departures.
Allegiant notes that its figures include scheduled service as well as “fixed-fee contract” flying.
Meanwhile, jet fuel prices remained relatively low at $2.52 per gallon on average during the first quarter, providing a favourable cost tailwind for the ULCC.
Airline industry watchers are awaiting first-quarter earnings results from American Airlines, Alaska Airlines and Southwest Airlines, which will provide a more complete picture of how domestic demand is responding to economic instability introduced by US President Donald Trump’s global trade war.
Earlier this month, Delta Air Lines and United Airlines reported weakening demand for low-cost air fares on domestic routes, as well as slackening demand for international flights originating outside of the USA. United plans to shave capacity from its domestic network in the year’s second half. However, both of those carriers reported strong profits in the first quarter, with international and premium demand humming along.
Sun Country CEO Jude Bricker said earlier this month that the US leisure market is likely to experience “downward pressure on demand” as a result of recent economic shocks.
Some analysts agree with United chief Scott Kirby’s prediction that US carriers not named Delta or United probably failed to operate profitably in the first quarter.
Allegiant executives will provide more details about the company’s market outlook during a conference call with investors and analysts on 6 May.
