Allegiant Air’s entry into Hawaii isn’t going as well as expected, but a top executive from the low-cost carrier said it’s too early to decide whether to pull up stakes after barely a year in the market.
The Las Vegas-based airline, which began service to the islands in June 2012, said Tuesday that demand is lagging from the smaller markets that make up the company’s business model.
"There’s just not enough bodies there to support year-round service at prices that make sense," Allegiant President Andrew Levy said on a conference call after the airline posted its 42nd consecutive profitable quarter. "So we’re seeking another market or two that we can operate on a year-round basis because there’s enough traffic density in the market, and that’s what we think L.A. will do for us."
The low-cost carrier known for connecting secondary cities to leisure destinations said earlier this month it would offer nonstop service twice a week between Los Angeles and Honolulu starting Oct. 30.
But that followed on the heels of a previous announcement in which the airline said it would suspend routes to Honolulu beginning Aug. 14 due to "a seasonal hiatus" from seven mainland cities. Those cities are Boise, Idaho; Spokane, Wash.; Eugene, Ore.; Phoenix; and the California cities of Fresno, Stockton and Santa Maria.
Allegiant later said two of those affected routes — Boise and Spokane — will be reinstated for the holiday season during the second week of December. The airline continues to fly nonstop between Las Vegas and Honolulu, and from Bellingham, Wash., to both Maui and Honolulu.
Levy said he doesn’t think that Allegiant, which flies 223-seat Boeing 757 aircraft to Hawaii, has allotted too many planes to the islands.
"If we can make Hawaii work as we had forecast initially, albeit maybe with a different seasonality and mix of markets then, no, I don’t think we have too many 757s," Levy said. "If we can’t have somewhere around six airplanes running to Hawaii year-round at acceptable margins, then the answer is probably to go to zero.
"But I think that it’s still too early to make that call," Levy said. "We’re learning a lot about the seasonal trends there. I think the network changes we’ve made are going to be very, very accretive. And we’re optimistic that a market like in L.A., for instance, is something that can help us drive the returns we anticipated when we decided to go to Hawaii."
