For years, Allegiant’s fleet has primarily consisted of second-hand aircraft. It has traded low aircraft ownership costs for higher fuel consumption and maintenance costs. To make it work, it used aircraft infrequently. Its MAX order somewhat changes this and spells a new era for the carrier.
Allegiant’s current fleet
Allegiant’s fleet comprises 121 aircraft with an average age of 13.4 years, according to ch-aviation.com. While often perceived as a relatively small operator, it has more narrowbodies than many other well-known airlines, including Malaysia’s AirAsia, KLM, SWISS, Volaris, and WestJet. Allegiant’s fleet is entirely Airbus and consists of:
- 86 A320s with either 177 or 186 seats
- 35 A319s with 156 seats
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How has its fleet developed?
Allegiant is renowned for many things, including being leisure-driven, serving thin routes, low frequency, secondary or otherwise quieter airports, small cities, high ancillary revenue, minimal flying on off-peak days, and used aircraft. And until November 2018, it was also known for its old and gas-guggling – but always loud and characterful – MD-80s.
For years, the ULCC has focused on older aircraft. They were cheap to acquire but more expensive to use. The carrier traded off lower fixed costs (i.e., expenses that remain the same regardless of asset use) with higher variable costs (i.e., expenses incurred when the aircraft are used).
It achieved this because of very low aircraft ownership costs and from having few block hours per day (compared to most other airlines). It primarily operates four days a week, as shown below, when demand is higher and it doesn’t need to discount even more to grow demand. It’s a very similar approach to Breeze and its second-hand Embraer 190s/195s.
A step-change in Allegiant’s fleet composition
Aside from its B757s, which were ring-fenced and pretty much about Hawaii, the step-change in Allegiant’s fleet composition is clear to see in the first figure above. The use of bigger aircraft has significantly reduced seat-mile costs and increased revenue-generating opportunities, ensuring increased competitiveness.
While its A319s and A320s were second-hand (some A320s were new), they were much newer than its MD-80s. Ownership costs rose, but it was offset by a big reduction in fuel consumption and increased operational reliability. They were pivotal in the airline’s development.
Incoming B737 MAXs
As widely reported, the next stage of Allegiant’s development involves the B737 MAX. It has a firm order for 50, split between the MAX 7 and MAX 8-200, the latter the same as Ryanair, as well as 50 options. They’ll coexist with its Airbus aircraft. There are multiple reasons why it chose the MAX, including aircraft availability, the deal secured, and far lower fuel consumption.
They’ll pave the way for the next stage of the airline. However, because they’ll be brand-new and much more expensive, the fixed cost-variable cost balance will likely change. To reduce the higher cost of ownership per seat-mile, Allegiant will probably use its MAX aircraft much more intensively than its A319s/A320s.
What do you make of the development? Let us know in the comments.