Allegiant to Hawai'i? Imposter Twitter account stirs buzz.

An Allegiant MD-80 parked at Las Vegas. Newer, longer-legged aircraft would be required for service to Hawai'i. (Photo: Allegiant Air)

UPDATE: It has since been learned through reader comments and Twitter that @allegiant is not the official Allegiant Twitter account (one of the pratfalls of working on Twitter). Amendments have been made below. Allegiant CEO Maurice Gallagher Jr. did make comments regarding possible Hawai'i service in April 2009. The real Allegiant can be followed on Twitter @allegiantair.

If nothing else, Twitter is a good place to plant a rumor. Las Vegas based Allegiant Air, or @allegiantair in Twitterese did not post regarding Hawai'i, but impostor @allegiant posted the following late Thursday night: “Have you folks heard the scuttlebud about possible Hawaii service on Allegiant starting in December?” I had to Google scuttlebud, and the search turned up dry of any sort of explanation. Even more interesting than this bizarre invented word (which surprisingly turned up nearly 500 of the non-explanatory hits), was this new sort of buzz marketing. The question is of course rhetorical. Hawai'i is a longtime interest of mine; airlines especially, so while initially thinking the post came from Allegiant itself, I set off to research the issue.

In the immortal words of Paris Hilton, spoken mildly ironically, “That’s hot.”  This isn’t the first time Hawai'i has been mentioned. CEO Maurice Gallagher Jr. made comments to the news organization Bloomberg about the possibility of Hawai’i service as early as April, but the story was mainly picked up by Hawaiian media outlets and few others.

As always, Hawai’i is a market that always seems like a good idea until the boom-and-bust realities of the State’s tourism dependent economy ring wake up calls. The H1N1 virus served as a windfall for the state’s tourism industry, as swarms of travelers cancelled Mexico vacations and rebooked for Hawai’i, conveniently more affordable after economic woes have kept travelers away from the once sky-high priced destination. But the half century roller coaster ride that sent Hawaiian Air through bankruptcy twice and eventually spelt the end for Aloha Airlines passenger service is pretty indicative of airline fortunes in paradise. Mahalo Air, Discovery Airways, Mid-Pacific Air and countless others fill the out the interisland requiem mass, and several other Mainland carriers have expanded and contracted Hawai’i service. Delta is a mere shade of Western’s once formidable operation, TWA and America West added and dropped service at intervals, and who even remembers the People Express and Hawaii Express?

With the loss of ATA and Aloha Airlines last spring, Hawaiian Airlines has picked up much of the slack. Traffic at the Honolulu based airline is up 11.99% year over year for February, the last month for which the Bureau of Transportation Statistics publishes data. Not bad for a contracting economy. Newcomer Alaska Airlines has been aggressively expanding since introducing new service in 2006. The airline recently announced frequency increases to Hawai’i from Seattle, as well as new service from Oakland.

Another question comes to mind: Would Allegiant’s model work for a market such as Hawai’i? The airline built a name for itself as a point-to-point carrier providing low fare service from secondary markets to sun spots such as Las Vegas and Florida, making a great deal of revenue through ancillary sales including car rentals, hotels, insurance, on-board food and beverage items, and other vacation extras. Even if it were only once a week, are there enough people in Missoula or Pasco wanting to go to Hawai’i to make putting a plane in the air pay off?

Another question to pose is whether Allegiant will abandon the point-to-point model in order to fill aircraft (it doesn't allow connections even if you find and build them yourself). Hawaiian and Aloha both served Hawai’i from the West Coast without the benefit of a large domestic network to connect traffic onward to Transpacific flights. There are several antidotes to such a dilemma, such as flying smaller aircraft (as Aloha did, although there’s a fine cost margin when operating small aircraft on longer routes) or partnering with other airlines for feed (as Hawaiian did on a very limited basis), or serving only high-density markets with strong, year-round demand for Hawai’i travel (both carriers). But where might Allegiant serve Hawai’i from?

Las Vegas is a shoo-in. It’s the top outbound tourist destination for travelers from Hawai’i, thanks to a large Hawaiian diaspora, reduced tuition at UNLV, and Boyd Casinos charter flights. Hawaiian Airlines has served the city since 1985. Boyd-owned Vacations Hawai’i has carted islanders in by the charter plane load since the mid ‘90s. Las Vegas abounds with Hawaiian restaurants, and Boyd-owned casinos such as the California and Main Street Station in Downtown Las Vegas can often feel like Honolulu with slot machines. There’s even an ABC Store to sate island needs.

Los Angeles is another possibility, given Allegiant’s new presence. However it’s a market that’s crowded. United, American, and Delta operate service to Hawai’i from LAX “focus cities”, Hawaiian serves the city multiple times daily from its Honolulu hub, and Continental flies a rare non-hub sector from LAX as well, although it recently downgraded the equipment to a 737 for the slack August-September months.

If Allegiant manages to keep fares low enough, a secondary market could support Hawai’i service as well. A major attractor factor for service to Bellingham, Washington for Allegiant has been its proximity to both Seattle and Vancouver; and it’s been well proven by the airline’s success that low fares will expand the distance people will drive just to board a cheap flight. However, the Bellingham strategy has already drawn Allegiant a hitherto un-dealt-with threat: direct competition. Not wanting to give up it’s Pacific Northwest dominance, Alaska Airlines recently announced it would match Allegiant on the Bellingham-Las Vegas route.

Wow, that’s a lot of writing from a less-than-140-character Twitter rumor (might I call it a “Twhisper”?). Allegiant’s certainly caught my attention, and it will be interesting to watch the developments in this new, admittedly gutsy plan. Allegiant has successfully flown under the radar of the established airlines for years by serving cities nobody else seemed to want to go, making work a business plan that had failed for so many others (Eastwind anyone? Doesn’t ring a bell? How about Transmeridian?). There are only so many markets one can expand to before the legacy carriers begin to notice, and regardless of how bleak the outlook is for many of them, they remain formidable opponents to will fight tooth and nail to keep what they have; Hawai’i may just be one of those things worth fighting for.

For more information: You can follow Scott on Twitter @Scottas66.