Allegiant Airlines’ ancillary revenue initiatives among most innovative in the world
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Allegiant is based in Las Vegas, but it has never relied upon the notion of “luck” as part of its business strategy. The airline was born in 1997 and immediately challenged all the rules of how to start an airline.
Allegiant maintains its industry leading margins by distancing itself from competitors, and by being very different from everyone else. This distinctive style includes innovative ways to generate ancillary revenue:
• Allegiant’s Sunseeker Resort development in Florida is projected to contribute ancillary revenue in excess of $6 per passenger on a systemwide basis.
• The carrier’s new family entertainment centers allow it to build deeper customer relationships and capture more leisure spending within Allegiant’s network of smaller cities.
• More than $16 per passenger is generated by baggage revenue policies, which include fees for large carry-on bags, and allow those without large carry-on bags to board first.
• The Allegiant World Mastercard provides a free inflight beer or wine for cardholders and is expected to generate annual earnings (EBITDA) of $50 million by 2020.
• The installment payment option (pay monthly) yields online shopping carts nearly 300% larger than those paid in full.