Allegiant Takes Direct Route to Profitability

A tiny upstart from Las Vegas is growing rapidly by putting a new twist on the formula.


Allegiant disagrees. At least 60 more cities in the United States and Canada fit its profile, the company said in an August filing with the Securities and Exchange Commission.

Chief executive Maurice J. Gallagher Jr. learned the low-cost airline business as a founder and officer at ValuJet Airways. The carrier grew rapidly before one of its DC-9s crashed in the Everglades in 1996, killing all 110 people on board. Gallagher left after ValuJet merged with AirTran Airways and took the smaller airline's name.

Under Gallagher's watch, Allegiant keeps a laser focus on the bottom line. When the airline identifies a promising new market, executives put a sharp pencil to local operating costs.

An important part of their decision to go into a new city is how much financial help the community chips in. Small airports that lost airline service during the industry downturn are particularly receptive.

Allegiant stands to get

$1.5-million in advertising help from the local airport and Pinellas County's tourism agency to promote its routes, and the airport will waive more than $800,000 in operating fees.

The airport expects to reap more than $10-million over five years from parking, concessions and other revenue generated by Allegiant customers.

Allegiant is unapologetic about insisting communities that benefit from its service pay to play.

"We're the event," said M. Ponder Harrison, managing director for marketing and sales. "Rock bands get paid by the venue."



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