Would a major buy Allegiant?
05-01-2015, 05:40 PM
#1
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Would a major buy Allegiant?
There is always talk of consolidation and who will buy who. It has been proven by the ULCCs that there is a previously untapped market for very basic fares and lots of ancillary fees. Although the majors have dipped their toes in this end of the market, I think they are hesitant to associate their name with many of the complaints that are unique to the ULCC segment. Allegiant's route network is in contrast to the typical network carrier. Sub-brands have been tried before (Ted, song, CoLite) often with poor results.
What if one of the big 3 purchased Allegiant and ran it is a completely separate brand? No joint marketing, no codeshare, keep the unique route structure, etc. Not an airline within an airline, but a wholly owned subsidiary airline for a different customer. Obviously there would be scope issues, but that could be negotiated appropriately.
Multiple brands work in hotels and rental cars. The reason it hasn't worked in the past is because it's better to fly a bigger plane or increase frequency than it is to split the flights between brands. But I think it would work if network routes are only major branded and the small city vacation routes are only the vacation brand.
What if one of the big 3 purchased Allegiant and ran it is a completely separate brand? No joint marketing, no codeshare, keep the unique route structure, etc. Not an airline within an airline, but a wholly owned subsidiary airline for a different customer. Obviously there would be scope issues, but that could be negotiated appropriately.
Multiple brands work in hotels and rental cars. The reason it hasn't worked in the past is because it's better to fly a bigger plane or increase frequency than it is to split the flights between brands. But I think it would work if network routes are only major branded and the small city vacation routes are only the vacation brand.
Last edited by uboatdriver; 05-01-2015 at 05:58 PM. Reason: Clarity
05-01-2015, 05:46 PM
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Originally Posted by uboatdriver
Obviously there would be scope issues, but that could be negotiated appropriately. The reason I think it doesn't work is because it's always better to fly a bigger plane or twice as many flights for your brand than it is to fly half the flights for major brand and half for sub brand. But I think it would work if most routes are only major branded and the small city vacation routes are only the vacation brand.
05-01-2015, 06:07 PM
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Originally Posted by uboatdriver
There is always talk of consolidation and who will buy who. It has been proven by the ULCCs that there is a previously untapped market for very basic fares and lots of ancillary fees. Although the majors have dipped their toes in this end of the market, I think they are hesitant to associate their name with many of the complaints that are unique to the ULCC segment. Allegiant's route network is in contrast to the typical network carrier. Sub-brands have been tried before (Ted, song, CoLite) often with poor results.
What if one of the big 3 purchased Allegiant and ran it is a completely separate brand? No joint marketing, no codeshare, keep the unique route structure, etc. Not an airline within an airline, but a wholly owned subsidiary airline for a different customer. Obviously there would be scope issues, but that could be negotiated appropriately.
Multiple brands work in hotels and rental cars. The reason it hasn't worked in the past is because it's better to fly a bigger plane or increase frequency than it is to split the flights between brands. But I think it would work if network routes are only major branded and the small city vacation routes are only the vacation brand.
What if one of the big 3 purchased Allegiant and ran it is a completely separate brand? No joint marketing, no codeshare, keep the unique route structure, etc. Not an airline within an airline, but a wholly owned subsidiary airline for a different customer. Obviously there would be scope issues, but that could be negotiated appropriately.
Multiple brands work in hotels and rental cars. The reason it hasn't worked in the past is because it's better to fly a bigger plane or increase frequency than it is to split the flights between brands. But I think it would work if network routes are only major branded and the small city vacation routes are only the vacation brand.
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05-01-2015, 06:25 PM
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Originally Posted by uboatdriver
There is always talk of consolidation and who will buy who. It has been proven by the ULCCs that there is a previously untapped market for very basic fares and lots of ancillary fees. Although the majors have dipped their toes in this end of the market, I think they are hesitant to associate their name with many of the complaints that are unique to the ULCC segment. Allegiant's route network is in contrast to the typical network carrier. Sub-brands have been tried before (Ted, song, CoLite) often with poor results.
What if one of the big 3 purchased Allegiant and ran it is a completely separate brand? No joint marketing, no codeshare, keep the unique route structure, etc. Not an airline within an airline, but a wholly owned subsidiary airline for a different customer. Obviously there would be scope issues, but that could be negotiated appropriately.
Multiple brands work in hotels and rental cars. The reason it hasn't worked in the past is because it's better to fly a bigger plane or increase frequency than it is to split the flights between brands. But I think it would work if network routes are only major branded and the small city vacation routes are only the vacation brand.
What if one of the big 3 purchased Allegiant and ran it is a completely separate brand? No joint marketing, no codeshare, keep the unique route structure, etc. Not an airline within an airline, but a wholly owned subsidiary airline for a different customer. Obviously there would be scope issues, but that could be negotiated appropriately.
Multiple brands work in hotels and rental cars. The reason it hasn't worked in the past is because it's better to fly a bigger plane or increase frequency than it is to split the flights between brands. But I think it would work if network routes are only major branded and the small city vacation routes are only the vacation brand.
Most majors have labor groups that wouldn't allow what you suggest anyway.
Majors seem to be focused again on capturing business/first class traffic and don't seem to need to compete on the ultra low cost front. What's more likely is that spirit/frontier/allegiant run into each other first.
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