What Allegiant’s Airbus A319s will look like. Image from Allegiant.
Today, Allegiant Air has announced that they plan to add 19 Airbus A319s into their fleet.
Allegiant will lease nine A319’s from GE Capital Aviation Services (GECAS) and also lease 10 A319s from Cebu Pacific Air. The first two A319s are expected to start service during the second quarter of 2013.
The aircraft, which will be configured with 156 economy class seats, will not be new and aged seven to ten years old at the time of delivery.
Can Allegiant’s success of a one model fleet, still exist with a fleet of three different aircraft types? Traditionally, Allegiant only flew MD-80 aircraft and more recently added the 757-200. Now, with a third aircraft type, that greatly increases training and maintenance costs. In a presentation given today, Allegiant stated that, “Pilot transition/training -less efficient, but manageable,” and that “Economics dictate this added complexity is worthwhile.”
“The A319 is a new aircraft type for Allegiant, but we otherwise see this as a continuation of our existing business model,” said Andrew C. Levy, Allegiant President. “A319 asset values have significantly declined and now mirror the environment we saw when we first began buying MD-80s.”
Allegiant is hoping to place the A319s on routes that are just marginally profitable for the MD-80 aircraft. The A319 is 25% cheaper per block hour with fuel and 40% lower on maintenance than the MD-80 aircraft. Also, the range of the A319 is greater with a 3,600 nm vs just 1400 nm, allowing Allegiant to look at longer route opportunities. At this time, the airline is not planning on increasing fleet utilization.
The airline is planning to retire two MD-80s, which have heavy maintenance checks coming up, but do not have future retirement plans at this time. By 2015, Allegiant is planning to be operating 56 MD-80s (58 now), six Boeing 757s (four now) and 19 Airbus A319s (0 now).
Buying the A319 is not a fleeting changing plan, but a fleet growth plan. There is no question that Allegiant got a great deal on the A319, since multiple airlines are dumping that smaller model for larger A320 and A321 aircraft. Soon, there will be more A320CEOs in the market, as airlines upgrade to the A320NEO family.
I would not be surprised to see additional A320 family of aircraft join Allegiant’s fleet before 2015. There will be a lot of change with the airline in the next coming years that will test their ability to succeed. I have a feeling that with the demand for rock bottom airfares increasing, they might be able to pull this off.
Well… Yes, adding the A320 family, currently in the form of the A319 (x19) to their fleet will complicate their crewing and maintenance programs a bit. Of course. However, I suspect that they already out-source the majority of their maintenance, so no biggie other than landing a good contract. A320-family maintenance shops are not difficult to find and 7-10 YO airplanes need less work than far older frames. Mr. Levy hinted at the real reason for this addition, being able to negotiate a Very Good Deal for this batch of A319s. There are a lot of them available and their availability will increase over the next 10 years or so. I’m sure that the airplanes are under dry leases and heck yes, He got a Great Deal. If he’s sharp – and he is, Mr. Levy probably included a cost reduction clause that will kick in if the fleet of homeless A319s increases beyond some secret number during the course of this initial lease. I see this as a smart movev for Allegiant – IF they can fill 90% of those 156, very tight seats. As with any other operator of flying seats, they must have butts in most of them, most of the time to continue printing their press releases (and pay checks)with black ink.
If this image is from Allegiant, it is interesting that they released a picture of what appears to be an A320 (two over wing exits).
Actually, the A319s configured to hold 156 seats have two over wing exits. They are rare birds, but my guess is Allegiant will be trying to buy them all out as they are for sale.
David