Emerging from a challenging 2022, Allegiant Air has made significant strides in reclaiming its operational and financial prowess within the industry. The airline, which faced operational hurdles and incurred over $130 million in irregular operations (IROP) costs in 2022, effectively reducing its margins, has since undertaken a robust internal overhaul. Greg Anderson, President of Allegiant, detailed this remarkable turnaround at the Aviation Week Network’s Routes Americas 2024 conference in Bogotá, highlighting the airline’s concerted efforts to improve its operational efficiency and financial health.
By strategically reducing peak-day flying and fostering a collaborative effort between its planning and operational teams, Allegiant managed to eliminate $100 million of IROP costs in 2023. This recovery not only solidified its operational standing but also reestablished its financial leadership within the aviation sector.
Looking ahead, Allegiant has prioritized the restoration of peak-period utilization, which historically contributes to 80% of the airline’s earnings. Despite a reduction in aircraft utilization from an average of 10 hours per day during peak periods in 2019 to about 7.5 hours in 2023, the airline is optimistic about the demand for peak-period flying. With concerted efforts aimed at restoring this crucial aspect of its operations into 2025, Allegiant recognizes the significant financial impact, with every hour of peak-day flying estimated to contribute approximately $100 million to its bottom line.
Operating from 24 U.S. bases and supporting around 500 scheduled routes during the peak summer season, Allegiant envisions the potential for an additional 1,400 routes over the next decade. To support this ambitious expansion, the airline aims to grow its fleet to 200 aircraft within the next five to six years. However, delivery delays have affected the introduction of the Boeing 737 MAX, a new fleet type for the all-Airbus operator. Of the 50 firm 737 MAX aircraft on order, Allegiant anticipates receiving up to 12 units in 2024, with the first expected to arrive shortly, marking a deviation from the 24 initially scheduled deliveries.
Allegiant’s proactive engagement with Boeing aims to ensure an orderly delivery schedule for the 737 MAX in 2024, with active discussions ongoing to address the delivery timeline. As Allegiant continues to navigate its growth trajectory and fleet expansion, the airline is poised to further solidify its market position, leveraging its operational improvements and forthcoming fleet enhancements to meet the burgeoning demand for air travel.
