Small-Market Travelers Pledge Allegiance To Allegiant

An airline brand thriving in today’s economy? That sounds as rare as the dodo, or at least as uncommon as an on-time, hassle-free flight. But Allegiant Air has not only enjoyed yet another consecutive profitable quarter, but the Las Vegas-based carrier was the envy of other low-cost airlines at last month’s World Low-Cost Airlines Congress in Barcelona.

Allegiant’s strategy, worth a look no matter what kind of brand you own or manage, is threefold: serve smaller markets neglected by the larger brands; cut costs by having customers pay for additional services they once enjoyed for free – without alienating those customers, of course; and partnering with brands in related businesses.

The typical Allegiant passenger travels from a small (usually cold) city like Bozeman, Montana, or Wichita, Kansas, to a vacation destination like Vegas or Orlando. That passenger will pay very little for his fare (an average of $87, one-way). But because of fees for everything from a glass of water to storing a quiver of arrows, he’ll be shelling out an average of $26 extra per flight.

Though it seems passengers should be rebelling against those extra charges, they don't. Allegiant co-founder and chief executive Maury Gallagher tells the Financial Times:

If you live in Sioux Falls, South Dakota, and we’re getting you out for $150 where once you had to pay $800, you almost want to be nice to us to make sure we don’t leave.

Those customers likely appreciate the non-stop service, or having any service at all: according to the Los Angeles Times, Allegiant has head-to-head competition in only six of its 134 routes. Shelling out a few extra bucks for snacks is likely not that big of a deal for these fliers.

The airline, which Gallagher stresses is “a travel company that happens to own an airline” (shades of the Starbucks brand strategy), partners with leisure and entertainment brands such as Starwood, Harrah's, and Alamo to create travel packages that bring Allegiant additional sources of revenue.

Smaller brands looking to thrive among larger ones, particularly in a sector that seems to favor big players, can learn a few things from the Little Airline That Could.