Loading

Allegiant’s model susceptible as oil spikes; May-2009 traffic preview

Las Vegas-based LCC, Allegiant Air’s ability to offer sustainable low fares requires strict cost control, and a key part of its lower cost structure centres on the operation of ageing MD-80 family jets, which the airline can purchase and refurbish for as little as USD4 million. While the aircraft are less fuel-efficient than newer types, Allegiant is able to purchase them outright for one-tenth the cost of a new B737 aircraft, and because of the low cost of ownership, the carrier is able to fly the aircraft less (seven hours per day versus 13 hours per day at JetBlue), which helps keep labor costs lower. Overall, Allegiant operates with 35 full-time workers per plane compared to more than 50 at other carriers.

Become a CAPA Member to access Analysis Reports

This CAPA Premium Analysis Report is 974 words.
Become a CAPA Member

Our Analysis Reports are only available to CAPA Members. CAPA Membership provides exclusive access to in-depth insights on the latest developments in the aviation and travel industry, developed by our team of dedicated analysts located in Europe, North America, Asia and Australia.

Each report offers a fresh perspective on the latest industry trends and is available online or via the CAPA mobile app, with customisable alerts to help you stay informed and identify new business opportunities.

CAPA Membership also provides access to our full suite of tools, including a tailored selection of more than 400 News Briefs every weekday and comprehensive data and analysis on thousands of companies around the world.