Office Hours

WEDNESDAY, AUG. 8, 2012, 9:58 A.M.

Allegiant comes to Spokane, but you might want to read the fine print

So it's now official that Las Vegas-based Allegiant Air will start flying weekly flights from Spokane to Oahu.

The story appeared on Spokesman.com earlier today. Some notable and not well-known facts about low-fare Allegiant. It flies into and out of 80 cities, including Bellingham, Wash. Which tells you how competive Allegiant has to be, if they choose to set up flights in and out of places like Missoula and Bellingham. 

Also notable is some of its operating philosophy.  It chooses about a dozen destination locations and then forms routes from smaller cities to those destinations. Yes, Allegiant.com lists Bellingham as a little gem of a getaway.

Here's another key part of their approach:  The airline uses the Ryanair model of looking for secondary revenue through sales of food, beverages, and souvenirs on board as well as charges for checking luggage and advance seat assignments.   Which means, the current discount rate of $180 one-way to Oahu doesn't stay that low when you start adding in other costs, like luggage. The St. Petersburg Times reported that the airline's average "extra"  revenues came to $33.35 per passenger in 2011.

And a Wikipedia entry added this nugget of insight: "Allegiant CEO Maurice Gallagher stated in an article that appeared September 2009 issue of Fast Company that the advantages of this pricing structure was psychological. He went on to say, 'We collect $110 from you at the end of your trip. If I tried to charge you $110 up front, you wouldn't pay it. But if I sell you a $75 ticket and you self-select the rest, you will.' "




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Tom Sowa
Tom Sowa covers technology, retail and economic development and writes the Office Hours blog.





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