Allegiant Travel Company focuses on transporting residents of small under-served cities within the U.S. Allegiant makes money by selling air travel from their low-cost passenger airline both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel related services. Building on the concept of relationships with premier leisure companies, Allegiant is designed to appeal to leisure travelers rather than business travelers. With the consolidation of the airline industry and a market that does not consist of fragmented small airlines as in Europe, Allegiant is dependent upon the relationships it can leverage rather than mass-marketing.
Allegiant separates revenue into three main categories as shown above. Allegiant recently implemented an open seating policy, which drove the take rate and additional revenue on priority boarding and assigned seat assignments since its implementation. Further, Allegiant continues to add strategic hotel, ski resort, cruise line and other product partners to enhance our offerings to our leisure customer base.
Because Allegiant operates solely in the leisure travel industry, the demand and average fare the company can charge is more dependent upon commodity prices such as oil and unemployment than other larger airlines that serve other market segments such as business travelers or cargo. Allegiant does not hedge fuel price risk, but had entered into forward contracts to reduce exposure to fuel price volatility in the past.
No cmolpanits on this end, simply a good piece.
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