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Michelle Grant, Euromonitor’s Travel and Tourism Research Manager, continues her discussion about the tourism and travel industries in Las Vegas, with a specific look at the airline industry. Passenger traffic to Las Vegas dropped by 8% in 2009, however, unlike the hotel industry, the airlines were able to cut capacity to recoup some of their losses. US Airways, one of the major airlines to fly into Las Vegas, has majorly cut its capacity to Vegas, choosing instead to focus on its hubs in the east coast of the United States.
One of the most profitable airlines in the world, Allegiant Air, is based in Las Vegas and has been able to stay profitable by flying from smaller cities around the US to larger tourist destinations like Orlando and Las Vegas. It also uses older planes which it was able to buy at a cheaper price due to the large amounts of fuel the planes use. The flight times for Allegiant are infrequent and the routes don’t experience interference with larger airlines.
Part of the airline strategy is to get ancillary revenue, and most airlines charge for checking a bag, checking in online, and other fees as a way to remain profitable. Another way to get ancillary revenue is to sell packages. Allegiant Air benefited from the low hotel rates in Vegas by offering packages to tourists – booking their flight and hotel at one time. Allegiant was able to negotiate low prices with hotels because they were desperate for guests during the recession. These packages drew in tourists and were a bright spot for the city.