Neal echoed the words of many Allegiant executives stating the operating economics of the Airbus A are far better than that of the A For several years, Allegiant flew Boeing aircraft.
The airline maxed out at six of the type and primarily used them for routes to Hawaii. In , when Allegiant entered into a purchase agreement for six Boeing s, the airline only operated MD aircraft , which could not make the hop to Hawaii.
By , Allegiant exited the Hawaiian market and waved goodbye to its Boeing aircraft, citing low demand; the airline pulled out entirely and has not returned to the islands since. For this, the carrier needs a plane that checks all the right boxes. Allegiant needs an aircraft that can fly more people and do it without increasing its costs by much. The Airbus A has significant commonality with the Airbus As and As, meaning the incremental costs of adding the Airbus A are much lower than adding a Boeing The second thing to recognize is that the market right now has many aircraft for cheap coming around.
Assuming an airline is willing to retire older owned Airbus As or cancel their leases, Allegiant could scoop up some planes for cheap, but the airline does not want to add them now.
Nevertheless, in the future, if there is a deal, the As could make an excellent addition. Allegiant Air does not sell connections, so it relies entirely on origin and destination, point-to-point demand. Allegiant could do well adding nonstop service to Hawaii. Given that Allegiant can keep its costs for flights to Hawaii low enough to get enough people to travel, there are plenty of points where the carrier can fly to Hawaii from.
This includes its bases like Las Vegas and Phoenix. It could also jump into some other markets like Oakland. With only a few planes, Allegiant could easily serve these markets. They will be among the last current-generation variants to roll off the assembly line before Airbus switches to production of an updated variant of the jet. With Airbus preparing to transition production of its current engine option models to new engine option models, we were able to negotiate an order for twelve end-of-line slots.
Gallagher offered more on the order in the company's quarterly earnings report , also out Friday. The new As are expected to enter service for Allegiant between and The deal gives Allegiant a total of 77 Airbus aircraft either already in service or committed for future delivery. By the end of , the company's in-service Airbus fleet will number 33, consisting of 16 As and 17 As. At the end of this year, Allegiant says it will have a total of 85 aircraft in revenue service.
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