Archive for June 16th, 2008
June 16th, 2008
(Kudos to the Tri-City Herald in Washington for the heads up on this)
Allegiant Air was one of only six U.S. airlines to turn a profit in the first quarter, according to a report issued by the U.S. Bureau of Transportation Statistics today. Not only did it turn a profit, but it was tied with the biggest operating profit margin: 8.1 percent of its income. So basically, it took an 8 percent surplus while all the legacy carriers lost money. All while charging less per mile for tickets than any other airline.
This despite the fact that fuel made up 54 percent of Allegiant’s operating costs, more than any other airline. But they do a great job keeping other costs down. It costs them 9.6 cents a seat for every available seat mile (behind only JetBlue). Compare that to the legacies, which spend 13 to 17 cents per ASM (on wages, benefits, equipment, maintenance and over overhead costs).
Meanwhile, Allegiant made 10.4 cents per available seat mile, more than any other low-cost carrier (though less than the legacies and regional carriers).Instead of making money on fares, though, it really makes its money on what you buy when you’re on the plane (food, drinks, trinkets) and on the vacation packages you book with Allegiant’s partner hotels, car rental companies and entertainment venues.
Allegiant has been cutting its long-haul, fuel guzzling routes in favor of shorter ones - dipping its average route length to under 900 miles last month - because it take in almost as much of that “ancillary revenue” on the shorter routes. So revenues don’t drop much, but costs do. That gives the airline the profit to add flights where it sees the best bang for its buck.
Of course, this model has been somewhat bad news for Chicago Rockford International Airport, which is among the farthest away from any of Allegiant’s destination cities. That means we’ve seen periodic cuts in service as fuel prices have taken off. We have a harder case to make to keep service - Rockford’s Allegiant flights have to make more money than “competitor” cities that are closer to Allegiant destinations to offest higher fuel prices.
Luckily, we’ve done so on our Phoenix/Mesa, Ariz., route, which returns this fall, and our continuing service to Orlando/Sanford, Fla., St. Petersburg/Clearwater, Fla., and Las Vegas.
June 16th, 2008
Gas prices slide in Rockford for the fourth straight day, but oil hit another record today, so look for a price rebound.
(Prices courtesy of AAA’s fuelgaugereport.com)
Gasoline: Rockford dropped 1.5 cents to $4.08 a gallon, more than five cents less than it was Thursday and the lowest level since June 8. We’re now seventh in the state in gas prices, the lowest we’ve been in a while. The state average increased more than a cent to a record $4.16 a gallon. The national average rose less than a cent today to a record $4.08. Illinois still has the ninth-highest gas prices in the nation.
Diesel: Rockford dropped half a cent today to $4.80, more than six cents behind the record set May 30. We have the second-highest diesel prices in the state, dipping ahead of Quad Cities ($4.77). The state average rose a fraction of a cent to $4.81 a gallon. That’s less than a cent behind the record set May 31. The national average remained at a record $4.80 a gallon. Illinois has the 19th-highest prices in the country (including the District of Columbia).
June 16th, 2008
Our vacation was going to be like “Planes, Trains and Automobiles.”
My wife and I are visiting ballparks around the Midwest and out East later this month. We planned to fly from Rockford to Detroit; rent a car to Pittsburgh; take Amtrak to Washington, Baltimore and Cincinnati; and then Megabus to Chicago.
But then the Rockford to Detroit flights were canceled. So it’ll be “Trains, Buses and Automobiles,” a lesser-known movie.
(Speaking of the Steve Martin/John Candy classic, I’ve seen it about a million times, while my poor wife has seen about a million individual snippets I force her to watch every time it’s on. We once had our own experience reminiscent of that movie: Late at night in Pennsylvania, I turned the wrong direction on a divided highway — “You’re going the wrong way!” — but fortunately we weren’t hit by two trucks.)
Despite our change in itinerary, I’m still excited for this trip because I’m a baseball fan and a transportation geek. My wife, who also loves baseball, is just excited to spend time reading while sitting on trains and buses.
I’m most excited about traveling by train, a rare pleasure since I moved to the Midwest. Normally, I just don’t have the time to take the more leisurely jaunt Amtrak provides, so I usually fly. But I love Amtrak because of no long security lines, more leg room and getting to eat in the dining car.
“It’s much more comfortable than any other surface mode,” spokesman Marc Magliari said Friday while traveling to Bloomington-Normal. “I’m right now looking out the window as we’re passing vehicles on I-55, going faster than you’re legally allowed to drive.”
Sure, there are delays on some routes, particularly long-haul trips that share tracks with busy freight operators. But these days, there are plenty of delays on other trips. Again, the legroom helps.
Magliari’s favorite view on the routes we’re taking is passing through the New River Gorge in West Virginia on the Cardinal train. He said we can sometimes see rafters in the river, and there used to be a lot of bungee-jumpers off a particular bridge.
Amtrak ridership has risen for five consecutive years, and officials expect to hit 27 million passengers in 2008. About half of the increase is attributed to high gas prices; the rest is because of added services and steps taken to increase reliability. Recent actions by Congress could help it leverage the freight railroads to make more progress on those delays.
Speaking of delays … someday we’ll have Amtrak again here in Rockford (knock on wood). That’s up to Illinois lawmakers and the long-debated capital plan.
That’s the biggest benefit of vacation: a week and a half to stretch my legs out, lean back and not think about that nonexistent capital plan.
Staff writer Thomas V. Bona may be contacted at 815-987-1343 or tbona@rrstar.com.
