Allegiant to buy six 757 aircraft through 2012

The Bellingham Business Journal

Allegiant Travel Company, the parent company of Allegiant Air, which is a major tenant at the Bellingham airport, has announced it has signed a forward purchase agreement to acquire six Boeing 757-200 aircraft. The introduction of the 757 aircraft will enable Allegiant Air to expand its leisure travel strategy into Hawaii, however it is not yet known if Allegiant will offer flights between Hawaii and Bellingham.

Allegiant CEO & Chairman Maurice J. Gallagher Jr. said that Hawaii is the most prominent leisure destination in the United States currently un-served by Allegiant and the small city customers have been requesting this service.

“We are very optimistic about our ability to exploit the large third party ancillary revenue opportunity we believe exists in Hawaii. We expect the sale of hotels, rental cars, and many attractions and activities popular with Hawaii visitors will provide a very meaningful contribution to the success of the service,” Gallagher Jr. said in a press release.

Allegiant plans to take delivery of these aircraft and place them in service with Allegiant Air on the following schedule:

  • Two aircraft delivered within the next two months to be placed into service in the fourth quarter of 2010
  • One aircraft delivered in November 2010 and another in January 2011 to be placed into service in the first half of 2011
  • Two aircraft delivered in the fourth quarter of 2011 with planned in-service dates in the first half of 2012

The six 757 aircraft are sister-ships and have been in service with a single European operator since original delivery from Boeing. The aircraft come equipped for extended twin-engine operations, as required for long overwater flights.

Allegiant expects to spend between $75 to 90 million through 2012 acquiring and preparing this fleet for service. While Allegiant is able to acquire and prepare the aircraft for cash, it believes it will finance some portion of the purchase.

Allegiant is acquiring this fleet with the express purpose of serving Hawaii, a major leisure destination that it cannot serve with its existing MD-80 fleet. Allegiant Air expects to launch service to Hawaii once appropriate regulatory requirements have been met.

Allegiant Air currently operates 46 MD-80 aircraft and the 757 program will not affect its MD-80 growth plans. Allegiant expects to have 54 aircraft in service by the end of 2010 – 52 MD-80 aircraft and two 757 aircraft.

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