Allegiant Air has experienced a significant turnaround from its operational challenges in 2022, according to remarks made by President Greg Anderson at the Aviation Week Network’s Routes Americas 2024 conference in Bogotá.
The airline, which faced over $130 million in costs due to irregular operations (IROP) in 2022—equating to roughly four points of margin—has since made strides in operational and financial performance through strategic changes and internal efforts.
Anderson highlighted the concerted efforts made in 2023 to address these challenges, stating, “In 2023 we said ‘no more,’ and our planning team came together with the operational team,” which resulted in eliminating $100 million of IROP costs. These efforts have repositioned Allegiant at the forefront of the industry in both operational and financial terms.
Allegiant Eyes Expansion with Plans for Additional Routes and Fleet Growth
Looking ahead, Allegiant is focusing on restoring peak-period utilization, a crucial aspect of its operations that represents 80% of the airline’s earnings.
The goal is to return to the 2019 level of aircraft utilization, which was approximately 10 hours per day during peak periods, compared to 7.5 hours in 2023. Anderson emphasized the value of peak-day flying, noting, “every hour of peak-day flying for Allegiant is worth about $100 million, or four points to the bottom line.”
With a network of 24 U.S. bases and approximately 500 scheduled routes during peak summer, Allegiant anticipates the potential for an additional 1,400 routes over the next decade. The airline also has plans to expand its fleet to 200 aircraft within the next five to six years, although delivery delays of the Boeing 737 MAX—a new fleet type for the all-Airbus operator—have impacted its expansion timeline.
Of the 50 firm 737 MAXs on order, Allegiant expects to receive 10, possibly up to 12, within the year, a reduction from the 24 originally scheduled. Anderson conveyed ongoing discussions with Boeing to ensure an orderly delivery schedule moving forward.