Allegiant Update
Allegiant SVP Commercial Lukas Johnson talks about benefits the company is deriving from a new revenue management system, its ancillary revenue strategy, investor reception to Allegiant’s planned new Sunseeker resort and its balance of peak versus off-peak flying for 2018.
Transcript
Lukas JohnsonWe've rolled out a new revenue management system a little over a year ago, and it went fully kind of implemented about four months ago, five months ago. The results have been great so far. We've seen pretty significant increases in load factor and unit revenues. Our [inaudible 00:00:23] is up every month since it's been implemented, so we've been extremely happy with the way it's worked out. We don't have a hard goal, but in terms of, we're always looking to push it up higher. I just spoke on the panel about this, but it's more about personalization as we're going through. Right now, most products have been implemented. People are charging for bags and carry on bags, and seats and priority access, things like that. Where it's really got to head is: Are we able to, each person coming in, match up exactly what they're looking to do? That's how we're going to push that insular number higher over the next couple of years.
You know, it's been an interesting kind of reaction from the investment community about the Sunseeker project, because on one hand; we've always bene known for doing kind of off-the-wall crazy things. We're the first to introduce a lot of different products. We're the first to ... You know, over 75% of the routes we've announced, nobody's ever historically run them. So we're always doing new and interesting things. Certain investors love it, and certain investors don't love it as much because it's just a different opportunity than most airlines are looking at.
Off-Peak flying continues to grow with us as we push the utilization up a little bit with the airbus. The airbus is much more efficient plane than the [inaudible 00:01:37], much better economical plane. Naturally, it means that the airbus that we're going to want to fly a little bit more, because it makes more money. So in the first quarter, off-peak flying grew about three times the rate that peak flying did. You'll continue to see that throughout this year and as we get to an all airbus fleet by the end of the year. That'll start leveling off, and you'll start seeing us grow equally on the peak and off-peak.
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