‘60 Minutes’ segment causes dip in Allegiant business

Allegiant Air passenger jets on the tarmac McCarran International Airport in Las Vegas, Sunday, January 28, 2018. Richard Brian/Las Vegas Review-Journal @vegasphotograph

Allegiant Air on Wednesday said a “60 Minutes” segment that questioned its safety record caused fliers to steer clear, but added business is returning to normal.

Since the segment aired April 15, the Las Vegas-based airline “experienced cancellations and a reduction in bookings,” John Redmond, president of parent Allegiant Travel Co., told analysts during a conference call about first-quarter earnings.

He did not provide numbers. But he added that the “degree of these cancellations and bookings have reduced each day to a point” where the carrier is “starting to reach normalcy.”

Lukas Johnson, Allegiant’s senior vice president of commercial, didn’t mention the CBS report by name but told anlaysts there has been “a lot of interest” in the carrier’s booking trends in the past 10 days.

He said “cancellations stabilized quickly within a couple of days” and there was no “significant” change in no-show rates.

Allegiant also continued its pushback against the report. Without offering specifics, Redmond said the segment had “misleading and inaccurate reporting” about the deep-discount airline.

“We had our reliability challenges in ‘15 and ’16, but that’s old news,” Redmond said, alluding to a rash of headline-grabbing mechanical problems and emergency landings. “The manner and way those challenges were presented was inaccurate, misleading and not reflective of our safety culture and practices then or now.”

He also said Allegiant was doing “significantly better” compared to last year “on all reliability metrics we and other airlines track.”

“This story is behind us,” Redmond said, “and we won’t be commenting any further as we move forward.”

“60 Minutes” reported that Allegiant self-reported more than 100 serious mechanical problems between Jan. 1, 2016 and October 2017, including rapid descents and engine failures.

The segment also claimed the Federal Aviation Administration was lax in enforcing safety regulations with Allegiant.

After the report aired, Allegiant Chairman and CEO Maurice “Maury” Gallagher issued a recorded statement saying: “Frankly, the story includes more inaccuracies and misrepresentations of fact than I can count, including biased sources and outdated data.”

A “60 Minutes” representative did not immediately respond to a request for comment Wednesday.

Allegiant, known for flying from small, underserved cities to warm-weather vacation spots, on Wednesday reported $55.2 million in profit for the three months ending March 31, up 31 percent from the same period last year.

Redmond also told analysts that Allegiant expects to complete financing “sometime” this quarter for Sunseeker Resort, its hotel-condo-retail development in Port Charlotte, Florida.

The project is expected to open in February 2020.

He said executives had slowed sales efforts to focus on finishing construction plans and “related content necessary to sell this product.” But he added they have 45 signed registration agreements, and another roughly 500 people had clicked the “Become an Owner” button on its website.

“Again, extremely impressive since we have nothing to show other than a floorplan,” Redmond said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.