Two months after celebrating its 10,000th passenger with rosy predictions about the future, Allegiant Air, the only commercial service out of Worcester Regional Airport, has told the city it will cease operations here Sept. 3.
Maurice J. Gallagher Jr., president and chief executive officer of the Las Vegas-based economy airline, told City Manager Michael V. O'Brien by phone Monday that escalating fuel costs forced Allegiant to end its nine month stint ferrying passengers between Worcester and Orlando-Sanford International Airport despite 85 to 90 percent capacity.
"We're down but not daunted," Mr. O'Brien said last night of the latest in a long series of airlines to depart Worcester over the last two decades. Allegiant becomes the 13th commercial carrier to come and go since 1988, when five commercial airlines served the airport.
The airline has been making twice-weekly flights to Florida, charging from $79 to $179 for one-way tickets. Mr. O'Brien said Mr. Gallagher assured him passengers holding tickets for flights after Sept. 3 will be reimbursed or offered tickets on other airlines.
Mr. O'Brien said he was told by Mr. Gallagher that the plane used by Allegiant on the Florida flights, the McDonnell Douglas MD 80, is not fuel efficient at that distance, cutting into its profit margin per flight.
City officials wondered, however, if other factors might be involved, including Allegiant's decision to become a publicly traded company, and the airline's recent announcement of expansion of service this fall in eight cities in the Mid-West and West.
"They're going public and have to show Wall Street they can cut to the bone," District 5 Councilor Frederick Rushton said. Allegiant is expanding, he said, in places without competition from other major airports," said District 5 Councilor Frederick Rushton. "Where's the competition in Missoula?" he asked referring to one of the eight markets Allegiant will add flights.
Mayor Timothy P. Murray said Allegiant will soon end its service at the Portsmouth, N.H., airport. High fuel costs made competing with major airports in Boston, Providence and Manchester more than the low-cost airline could absorb.
"With deregulation, 9-11 and now the high fuel costs, these are very difficult times for airlines," the mayor said. While Allegiant's decision was "clearly disappointing," Mr. Murray said it did not reflect negatively on the potential viability of the airport to support commercial traffic.
"We kept our part of the bargain," Mr. Murray said. "They may be leaving, but it's not because of lack of interest or lack of passengers."
Efforts to reach Allegiant executives last night were unsuccessful.
Councilor At-Large Konstantina B. Lukes said the news was "a hit in the stomach again."
"I thought we had a good partnership," Mrs. Lukes said. "This wasn't the city's fault. We were certainly willing to go the extra mile for the airline. You'd think they would be able to hang on for the busy travel season to Florida. And the trend was supposed to be in favor of regional airports and smaller airlines."
Unless Worcester can develop more political muscle in Boston, Mrs. Lukes said she was not optimistic about the airport's future. "I don't know how we can recover from this without political clout or at least a sympathetic ear in Boston," she said.
Rushton's optimism for the future of commercial service remains undeterred despite the 13 airline departures.
"We didn't understand how to market the airport in the past," Mr. Rushton said. "The bottom line is that it's not fantasy that this airport will work."
Councilor at large Joseph M. Petty, chairman of the council's Transportation Committee expressed confidence that good news would soon emanate from the airport.
Mr. O'Brien said the city continues to talk to several commercial and corporate carriers. He said seven "entities" also have expressed interest in two parcels of land near the airport. He stood by recent comments that he will have an announcement of a deal in the coming weeks.
"We have shown that the right airline, with the right flights going to the right destination can be successful here," Mr. O'Brien said
The airport is being managed by Massachusetts Port Authority until June 2007.
"We certainly can't bear the entire cost of running the airport on our own," Mr. Murray said. The operating deficit of the airport is $2.3 million a year.
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