Allegiant Air’s new planes bring new plans

When executives at Allegiant Air made their surprise announcement last month about plans to acquire 19 Airbus A319 jets over the next three years, it was big news. It could have important implications for Southern Nevada’s tourism outlook.

Allegiant officials said they would retire two of their MD-80 series jets with the acquisition of the new planes. Allegiant’s fleet has two MD-87s with only 130 seats. The company now can afford to get rid of those “oddballs of the fleet,” as President Andrew Levy described them.

Allegiant is also in the process of remodeling the rest of its MD-80s by adding 16 seats per plane to bring the capacity of each to 166.

With the two retirements, Allegiant will gain a net of 17 planes. It’s not likely that all of those jets will be dedicated to Las Vegas routes, but the fact is there’s potential for capacity expansion here, meaning more visitors from small towns across the country.

The A319s have a range that’s almost twice as long as the MD-80’s. They could fly nonstop to Las Vegas from anywhere in the continental United States, setting up the possibility that Allegiant could schedule flights here from more cities east of the Mississippi.

Allegiant sells more hotel rooms in Las Vegas than any other resort city it serves, so it could be motivated to add more routes.

During the company’s quarterly earnings conference call, executives said there are about 20 U.S. airports Allegiant could serve with A319s that it can’t with MD-80s. In addition, flying A319s would open the door to the possibility of serving 10 cities in Mexico to and from Las Vegas and Orlando, they said. Presumably, those would fit the Allegiant model of serving small cities overlooked by the likes of AeroMexico and Volaris.

Or Allegiant could keep its routes relatively stable and instead take advantage of the A319’s operational efficiencies to save money every time a plane takes off. The A319s are far more efficient than the gas-guzzling MD-80s designed and built in an era of lower fuel costs.

For an idea of how much more efficient they are, Allegiant estimates savings of $1 million per plane per year. That’s despite the airplanes having 10 fewer seats than the MD-80s, and it includes the expense of training crews and acquiring surplus parts.

Because the airplanes are used, Allegiant is obviously getting the jets for far less than they would have if the airplanes had just rolled off the manufacturer’s floor. But that’s a key part of Allegiant’s often misunderstood business strategy: Buy the planes for a song and take advantage of their long lifespan.