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The Honolulu Advertiser
Posted on: Saturday, March 6, 2010

Hawaii will be newest destination for budget airline Allegiant

By Alan Yonan Jr.
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser
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Budget carrier Allegiant Air said it plans to launch nonstop service to Hawai'i late this year with a fleet of six Boeing 757-200s in a move that will make the Islands more accessible to visitors from smaller cities in the western U.S.

Allegiant, a subsidiary of Las Vegas-based Allegiant Travel Co., has been successful with its strategy of offering low fares for people in small cities to visit vacation destinations in Florida, California and the Southwest.

Allegiant has posted 28 straight quarters of profits at a time when many airlines have struggled with declining demand and high fuel prices.

Allegiant said it plans to purchase the 757s in phases and put them into service over a period stretching from the fourth quarter of this year through the first half of 2012.

"Hawai'i is the most prominent U.S. leisure destination currently unserved by Allegiant, and our small city customers have been requesting this service," said Maurice Gallagher, chairman and chief executive officer.

In addition to air travel, Allegiant also offers travel packages that include hotel rooms, rental cars and other travel-related services.

Allegiant's announcement was welcomed by the local tourism industry, which has just recently begun to see signs of improvement after nearly two years of falling visitor arrivals and lower spending.

"The convenience of access that this new service brings is huge," said David Uchiyama, head of marketing for the Hawai'i Tourism Authority.

"They'll be flying from places like Bellingham (Wash.), Eugene (Ore.) and Stockton and Monterey (Calif.) places that are off the normal routing path," he said.

"A lot of these people want to go to Hawai'i but it's inconvenient because they have to get to a major city."

Other smaller cities served by Allegiant include Medford and Bend, Ore.; Santa Maria and Fresno, Calif.; Pasco, Wash.; and Mesa, Ariz. A company spokesman said specific Hawai'i routes will be announced at a later date.

Allegiant said it expects to spend $75 million to $95 million through 2012 acquiring and preparing the fleet for service. The purchase will be done with a mix of cash and borrowing, the company said.

The planes are being acquired from a European carrier, which purchased them from Boeing.

Allegiant must clear several regulatory hurdles, including obtaining certification from the Federal Aviation Administration to fly a new type of aircraft, said company spokesman Tyri Squyres.

Allegiant currently operates a fleet of 46 MD-80 aircraft, which are not certified to fly over such large expanses of water, she said.

Uchiyama said the new Allegiant flights will help with the continuing effort to replace the airlift that Hawai'i lost when Aloha and ATA airlines went out of business in the spring of 2008.

"Air seats have been a concern of ours since the loss of those two carriers two days apart. We're always looking for opportunities (to bring more flights)," Uchiyama said.

In the case of Allegiant, the airline's director of consumer marketing walked into Uchiyama's office two years ago and said the company was interested in entering the Hawai'i market.

"I got a picture of what he wanted. We jumped into my car and I drove him around Waikīkī to give him a sense of the place," Uchiyama said. "It was the first time he had ever been to Hawai'i."

The marketing director, Christopher Stacey, is scheduled to reveal more about Allegiant's plans March 17 at the HTA's spring marketing update .