Air travelers looking for deals turn to ultra low-cost carriers
David Clark goes the distance when it comes saving money.
The 51-year-old Canadian intentionally avoids the international airport just a few minutes away from his home in Vancouver.
He’d rather drive about 50 miles south and cross the border into the United States to a small airport in Bellingham, Washington — just to board a no-frills flight aboard Allegiant Air.
“It’s the most direct, and it’s cheaper,” Clark said during a recent trip to Las Vegas.
Clark is among a growing number of travelers who don’t mind the stripped-down, bare-bones options offered by ultra low-cost carriers like Allegiant, Spirit Airlines and Frontier Airlines.
Those airlines generally tack additional fees onto the base fare for checked luggage, seat preferences, snacks or a soda. Costs climb even higher when passengers pay for the privilege of carrying a bag on board.
But it’s that initial promise of a cheap flight to a desired destination that’s driving the growing popularity of ultra low-cost carriers, both nationally and in Las Vegas.
“Having options gives people a choice in how much they want to pay to travel in this age of airline consolidation,” said Dan Benzon, president of the airport consulting firm Trillion Aviation in Austin, Texas.
“By providing options, prices tend to go down for flights to popular destinations, like Las Vegas,” Benzon said. “I think ultra low-cost carriers are just now starting to gain some traction, and we’ll find out over the long term whether it’s a viable business model.”
Still, some travelers prefer an “all-in-one” inclusive price package when booking a flight, compared to the cafeteria-style selection of services offered by ultra low-cost carriers.
Watching the prices gradually climb for basic necessities can be “a big turn-off,” said Mike Miller, who recently flew from Chicago to Las Vegas aboard Spirit Airlines.
“I think the idea of going for the cheapest airfare is something my wife and I, in the future, will reconsider,” Miller said.
‘Inviting and enticing’
Over the past two years, Spirit has grown to become the fifth busiest airline at McCarran International Airport, overtaking a spot previously held by Allegiant. And Frontier is doubling down on Las Vegas by hiring 300 new flight attendants for a new crew base set to open next year.
Taken together, the three ultra low-cost carriers accounted for 15.7 percent of the total passenger traffic at McCarran in 2016, up from 11.4 percent in 2012.
“Las Vegas is designed for the low-cost carrier because we’re a destination city, but we’re also a discretionary city,” said Rosemary Vassiliadis, director of Clark County’s aviation department.
“People don’t want to spend a lot of money to get here, but then behaviors change once they’re here,” Vassiliadis said. “That’s very inviting and enticing for the ultra low-cost carriers to look at Vegas.”
But would Vassiliadis ever board a flight on those airlines?
“Personally, I don’t like it,” Vassiliadis said of the ultra low-cost business model. “I’d rather pay one fee to get everything. But passengers seem to be responding to that style of flying, so I don’t see it going away.”
Price is the single biggest factor when purchasing an airline ticket for more than 80 percent of travelers in the United States, according to a Reuters/Ipsos opinion poll released in August.
Of the 2,316 adults surveyed online, 60 percent said they would not pay more money for a more desirable window or aisle seat, while roughly half said they would not pay extra just to fly on their preferred carrier, according to the results provided by Reuters/Ipsos.
“There are some people who fly based on brand loyalty, but there are far more others who buy an airline ticket based on the fare,” said aviation consultant Mike Boyd, president and CEO of Boyd Group International in Colorado.
“Ultra low-cost carriers are in the business of offering something that people couldn’t afford to buy before,” Boyd said. “There are a lot of challenges when flying with these carriers, but they have made it so that traveling is more of a consumer product than ever before.”
“Ultra low-cost carriers are in the business of offering something that people couldn’t afford to buy before,” Boyd said. “There are a lot of challenges when flying with these carriers, but they have made it so that traveling is more of a consumer product than ever before.”
Hometown airline
Maurice Gallagher found promise in the small, underserved airports that were generally ignored by larger air carriers.
Shortly after assuming control of Allegiant in 2001, Gallagher focused on connecting fairly remote cities like Bozeman, Montana and Fargo, North Dakota, with popular destinations in Southern California, Florida and the company’s hometown of Las Vegas.
“We’ve gone into these markets and have been able to offer low-frequency flights two, three or four times a week at really discounted rates, and people are taking advantage of that,” said Keith Hansen, Allegiant’s vice-president of government affairs and airports.
“These are middle- and lower-income families who want a vacation,” Hansen said. “And, in many cases, this is their only option.”
Allegiant is armed with a small fleet of planes, which means a canceled flight could take days to reschedule and potentially upend an entire family’s vacation plans.
Such was the case when Allegiant had to reschedule 11 flights headed out of Las Vegas and canceled one departure due to heat and maintenance issues spanning July 30 and 31.
Refunds and rescheduled flights were offered, but it was difficult to make same-day adjustments because the problems arose during Allegiant’s busiest time of the year, a company spokeswoman said.
Online reviews show that Allegiant has struggled for years with on-time performance, which the company must start reporting next year to the U.S. Department of Transportation.
Hansen said problems with cancellations and delayed flights may be alleviated when two planes are positioned at a new $40 million crew and maintenance base set to open in Indianapolis by February.
“I think the model is sustainable as long as we adhere to our core values,” Hansen said. “That’s making sure that we make flights affordable, and keep costs as low as we can.”
Spirit rising
While Allegiant’s presence has remained steady at McCarran, Spirit has surged to become one of the airport’s five most-scheduled carriers.
“We’re the fastest-growing airline in the country, and Las Vegas is a destination that people want to visit,” Spirit spokesman Paul Berry said. “They don’t want to spend a ton of money to get there, but they do want to have enough money in their pocket for gambling, entertainment and food.”
Berry admits that legroom and personal space can be a little tight on flights offered by Spirit and other ultra low-cost carriers because the planes are packed with a higher number of seats compared to other airlines. He equated the move to carpooling: packing more people on board cuts into a passenger’s share of fuel costs, resulting in a cheaper trip.
Spirit was losing money in 2006 and studied the rising success of Europe’s ultra low-cost carrier Ryanair. The Florida-based carrier adopted a similar model and targeted a demographic of college students, senior citizens and other travelers with fixed incomes.
Customers are drawn to Spirit’s cheap airline tickets, but Berry admitted that many of them quickly grow frustrated by extra charges for carry-on bags, snacks and other items that are generally included in the cost to fly other air carriers.
Plus, Spirit had the worst rate of passenger bumping and complaints during the first half of 2017, according to a study of 12 airlines released in August by the Transportation Department.
“The challenge is to keep them as happy as they were when they first saw your price and to be transparent about what they’re getting,” Berry said. “As the years go by, people are starting to understand this and choose this method because the overall fares are still lower than what the traditional carriers are offering.”
A new Frontier
For years, Frontier had an identity crisis by trying to model itself after Southwest Airlines. Of course, that didn’t work.
“There was no reason to duplicate that because, well, Southwest is Southwest” said Daniel Shurz, senior vice president of commercial for Frontier Airlines.
The company was purchased by a private equity firm in 2013 and switched to the ultra low-cost model. Today, Frontier drives airline ticket prices down by flying planes for up to 13 hours daily — defying the industry standard of nine to 11 hours.
About 30 percent of Frontier’s fleet run late night red-eye flights, which applies increased pressure on the company’s overall operations and on-time performance, Shurz said.
“You don’t get a clean start in the morning, so you have to make sure the flight is running on time,” Shurz said.
Frontier has rapidly grown in Las Vegas, making it the carrier’s third most popular destination after its home base in Denver and second-place Orlando, Florida.
More than 1.9 million passengers boarded a Frontier flight to or from Las Vegas last year, nearly triple the rate reported in 2012. Frontier plans to bolster service in Las Vegas by hiring 300 flight attendants for a new crew base set to open next year.
“We want to stay relevant to Las Vegas,” Shurz said. “It’s a great destination that will always be in high demand.”
Contact Art Marroquin at amarroquin@reviewjournal.com or 702-383-0336. Find @AMarroquin_LV on Twitter.
Complaints show the real cost of ultra low-cost carriers
Figures released in August by the U.S. Department of Transportation, in a comparison of 12 airline carriers.
• Passengers on Spirit Airlines were more likely to lodge a complaint, have a canceled flight and be involuntarily bumped from the plane during the first half of 2017.
• About 4.1 percent of Spirit’s 13,486 flights were canceled between January and June, although American, a much larger carrier, canceled 1,294 flights.
• Frontier ranked third with 0.3 percent cancellations for 8,913 flights.
• Spirit also had the highest rate of bumping, with an average of 1.06 people involuntarily denied boardings per 10,000 airline passengers. Frontier had seventh-worst bumping rate of 0.48 per 10,000 passengers.
• Spirit customers were the most likely to grumble about their flights, with 6.74 complaints reported per 100,000 airline passengers between January and June. Frontier had the second worst rate with 3.39 complaints per 100,000 passengers.
• Allegiant Air will be required next year to report its statistics to Department of Transportation.
