Allegiant Air and Hawaiian try to mitigate growing pains in new markets

Behind solid financial performances recorded by US carriers Allegiant Air and Hawaiian during 2Q2013 were challenges each carrier continues to face in their respective expansion strategies - Allegiant from the mainland to Hawaii, and Hawaiian on its rapid long-haul expansion into Asia and Australasia.

Allegiant is introducing a slight shift in its Hawaii strategy by launching service from Los Angeles to Honolulu, which runs somewhat counter to its long-standing model of offering service from small US markets to large leisure destinations. Hawaiian, meanwhile, assures its long-haul expansion will slow in the near future as it works to improve its performance in some of those markets, which have been challenging for a number of reasons.

As each carrier works to improve its fortunes in new areas of expansion, Allegiant and Hawaiian did post respectable results during 2Q2013 as Allegiant's top-line revenues increased nearly 11% to USD256 million while year-on-year profits grew 2% to USD26 million. Hawaiian grew top-line revenues by 10% to USD533 million, and recorded a healthy increase in profits from roughly USD4 million to USD11 million. (See background information.)