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Why is Allegiant's Load Factor Dropping While Others Increase?

As July traffic numbers continue to roll in, we see load factor increases nearly across the board. Southwest leads the pack with a whopping 6.9 point increase year-over-year, but there are a couple that saw lower loads in July. One was AirTran, down .9 points, and the other was Allegiant, down a staggering 5.6 points. What's going on?

First, we have to remember that Allegiant was already running at incredibly high load factors. Last July they filled 95.2 percent of their seats, so a 6.9 point increase like Southwest saw is physically impossible. But that still doesn't explain why loads would have dropped to a "mere" 89.6 percent right smack in the middle of the busy summer season.

Take a look at the change in available seat miles (ASMs) and you'll have your answer. This July, Allegiant flew 50.1 percent more ASMs than last July. In June, they flew only 37.8 percent more than the previous year and in May it was only 22.9 percent more. So Allegiant really decided to throw capacity out there this summer and see how they could do.

To run just shy of a 90 percent load on such rapid growth is still quite impressive. And Allegiant is quick to make changes where necessary. For example, the weak Monterey-LAX route is being cut after Labor Day this year after only a couple months of flying.

So I don't see anything to be concerned about in these numbers, despite what others may be saying. They really threw a ton of capacity out there in July and it didn't all hit as they planned. That's not that concerning since they have the flexibility to make rapid changes as necessary.

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