5:00am

Thu September 6, 2012
Business

What’s Next After Allegiant Takes Off?

Since Allegiant Airlines decided to stop service to Northern Colorado, there have been many questions, including if another airline might take its place. 

KUNC’s Brian Larson spoke to Northern Colorado Business Report Reporter Molly Armbrister about some of the potential options.

Larson: Allegiant has been a fixture at the airport since at least 2003. And the news of their – pardon the pun – departure came very suddenly. What details do we know about why their leaving Northern Colorado?

Armbrister: In late August, officials from the City of Loveland and Fort Collins-Loveland Airport were informed that Allegiant Airlines had decided to stop service to the area. Allegiant flew to Las Vegas and Phoenix, Ariz. from Northern Colorado. Service to Phoenix stopped immediately and service to Las Vegas is set to end October 29th.

Larson: What was Allegiant’s reason cancelling their service?

Armbrister: Unfortunately, we still don’t have a good answer to that question. As I understand it, folks from both the city and the airport tried to get answers from Allegiant, but were only told that the move was the result of an “internal business decision.”

Larson: Was it anything related to performance? How was Allegiant doing in the Northern Colorado market?

Armbrister: Pretty well. According to the airport director Jason Licon, Allegiant’s profitability was excellent out of Northern Colorado. The number of passengers who had boarded planes at the airport increased 26 percent to nearly 45,000 in 2011 from 2010. Allegiant passengers represented 95 percent of that total. Northern Colorado residents flew out of the area a lot more than people from Las Vegas or Phoenix flew in, but it seems like it was a pretty lucrative market for Allegiant. The most recent financial statements show that company as a whole is also doing well.

Larson: The airport made several upgrades recently including resurfacing the runway and to its terminal. Here’s what Airport Director Jason Licon told me last week.

Licon: “We did have a pretty large project, a $7.5 million dollar project to rehabilitate our primary runway and to put an extension on our terminal to accommodate the additional traffic we’ve been receiving.”

Larson: So it’s probably pretty likely that another airline will step in and pick up where Allegiant left off?

Armbrister: That seems to be the consensus. Both the airport director and the president of the Fort Collins Convention and Visitors’ Bureau think that it won’t take long at all for a new airline to enter the picture. It seems most likely that the new carrier will be a smaller, discount Western airline with a business model similar to Allegiant’s, which included packages flights with hotel stays. Any airline that takes Allegiant’s place will most likely fly to Las Vegas, because of how popular those flights were with Northern Coloradans. Last, an airline that steps in would probably not have a large presence in Denver.

Larson: So what are some of the airlines that meet those qualifications?

Armbrister: Well there are a lot of them, of course, but we looked at three in particular. JetBlue, Spirit Airlines and AirTran, a subsidiary of Southwest Airline, all look plausible based on what we were told.

Larson: And what are some of the highlights of those three airlines,that might make them a good fit?

Armbrister: Well JetBlue already flies out of DIA, but doesn’t fly from Denver to Las Vegas. JetBlue would fit well into the community because it strives to keep things environmentally friendly, something that Northern Colorado residents tend to appreciate. Spirit’s business model is probably closest to Allegiant’s. Spirit enables passengers to package together flights and hotel stays, as well as rental car service. Spirit Airlines will have flights from Denver to both Las Vegas and Phoenix, beginning in October, but it seems like the Fort Collins-Loveland airport would fit them better because it’s a much smaller airport than DIA. AirTran also has a presence at DIA, but does not fly to either Las Vegas or Phoenix from Denver. AirTran also has a strong business travel program, called a2b, which offers travelers a variety of benefits.

Larson: Molly Armbrister is a reporter at the Northern Colorado Business Report.