Allegiant Airlines Lays off 87 in Bid to Keep Flying
The Las Vegas-based airline seeks restructuring solutions as passenger load drops 90 percent
June 30, 2020
Allegiant Airlines president John Redmond sent a team thank you letter this week following a flurry of pink slips Monday that eliminated 220 positions and sent 87 staff members to the unemployment offices. While the notices were generous – keeping salaries going through the end of September and medical benefits in tact through the end of the year, Redmond admitted the airline was reeling with no clear vision of the future.
“The picture has changed significantly from where we were in April, when demand for air travel plummeted as communities across the country shut down. Today, more people are flying, but recent increases in COVID-19 cases have chilled our momentum in bookings,” Redmond noted in his letter to staff members.
The Las Vegas Review Journal reported that Allegiant saw just 199 passengers at McCarran International Airport in April — increasing to 20,268 in May, which was down 90 percent compared to May 2019, according to numbers provided by the Clark County Department of Aviation.
The airline was reported to be burning through cash to keep things afloat during the past three months of the pandemic. Las Vegas casinos and resorts shut their doors in March and demand plummeted for vacation flights to the neon gaming mecca.
Those hotels opened back up in June, but quickly saw crowds that wanted to party and socialize, not social distance. As corona cases spiked once again, the city clamped down with a “No Mask, No Dice” policy.
“We want our visitors to feel confident that coming to Las Vegas is still a fun and healthy experience. We know how much our visitors miss Vegas, and we want to welcome them back to enjoy the destination as safely as possible,” said Steve Hill, president/CEO for the Las Vegas Convention and Visitors Authority. “The mask mandate is a necessary and smart step to make sure we can continue to share the world-class experiences you only find in Las Vegas.”
As the city began its wishful advance back to pre-Covid normalcy last month, Allegiant wagered that numbers would improve during June as pent-up demand for vacation destinations, including Las Vegas, would continue to attract travelers. The airline operated nearly 70% of its usual schedule for the first week in June.
“Even with the increases in capacity, we were able to maintain load factors just shy of 50 percent. With Las Vegas opening early June, we expect modest improvements to continue throughout the month,” wrote Allegiant revenue chief Drew Wells.
On Monday, Nevada Governor Steve Sisolak announced the extension of Phase 2 through the end of July. However, the reality of that statement – the opening of bars, restaurants, retail, entertainment, tattoo parlors – just about everything but brothels, clubs and adult establishments – will likely meet a wall similar to what is happening in Florida, Arizona and Texas as social gatherings swell and protective measures are not enforced.
“And so the roller coaster will continue – no one can know for how long. While July will show increased traffic compared to previous months, it is followed by our traditional fall slow down. Unlike pre-pandemic, we are unable to forecast what the outcome will be for fall and into 2021,” Allegiant’s CEO noted.