Allegiant Air attacks United in New York, testing niche ULCC model in large competitive metro market

The US ULCC Allegiant Air is stepping outside its typical network framework during late 2016 when it adds service from Newark Liberty International airport, a major hub for United Airlines. Newark, which caters to business and leisure travellers in the New York metro area, is not the typical large city market that Allegiant usually enters. With a few exceptions, Allegiant's larger markets are heavily weighted toward leisure travellers; its top bases are Orlando Sanford and Las Vegas McCarran.

Allegiant is breaking United's monopoly on three of four routes that it is adding from Newark, challenging United to find ways to respond to the new competition. But Allegiant's operating profile is different from that of typical ULCCs, which means that United may not be forced to craft any response to Allegiant's small presence in Newark by YE2016.

Allegiant's decision to enter the New York market was driven by an opportunity emerging after US regulators eased operating restrictions at Newark. It is an easy, low-risk way for Allegiant to test the waters in larger markets while largely sticking to its niche formula of linking small to medium-sized cities to large leisure destinations.