Allegiant Air Case Study

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Everyday approximately two million people fly in the United States. This huge industry helps drive $1.5 trillion dollars annually and supplies the United States with more than 11 million jobs (Partnering in Safety & Security). Even with this huge amount of revenue for the industry, many airlines struggle with profitability. There are multiple reasons that airlines struggle with profitability. According to the Harvard Business Review, the biggest reasons that airlines struggle with profitability are that consumers are now familiar with cost cutting strategies, empty seats, and mergers and acquisitions. Mergers and acquisitions are becoming more popular as companies try to buy growth instead of compete with other airlines. This …show more content…
Allegiant Air primarily looks to serve leisure travelers that are going from Northern United States to Southern United States. Allegiant Air started with very few routes but has seen rapid growth recently. The rapid growth of the company has been recognized in Fortune 100’s Fastest Growing Companies: listed at 25. Allegiant Air has 11 operating bases where flights are constantly offered. The 11 operating bases have flights in 114 cities around the United States. Allegiant Air copied parts of Southwest’s business model. This includes only offering direct flights. Also like Southwest, Allegiant Air removes the middle man and only offers airline tickets through their …show more content…
First, Allegiant Air has a well-defined target market. Allegiant Air targets leisure fliers that are going on vacation to warmer markets. Allegiant Air does not offer business class seats. Focusing on just one segment in the market allows all the seating on the plane to be the same. Based upon the results of Deloites study on airlines, leisure fliers have much different preferences than other fliers. The most important factor for leisure customers is price. Price was even rated more important than safety for these fliers. Below is a small part of the table showing the importance for value. The full table is located in the appendixes (Wissenberg, Adam, and Johnathan

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