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« Mayo Clinic's Nobel Prize work at heart of $5.6B drug deal | Main | Associated Bank working on new spots for Rochester branches »

April 09, 2014

Allegiant Air pulling out of Rochester… again

Allegiant Air announced Tuesday that it's pulling out of the Rochester International Airport and will end its weekly nonstop flights to Arizona on May 14.

Allegiant"We are always disappointed to end service in a market," said Eric Fletcher, Allegiant's manager of airports. "We thank the Rochester International Airport for their partnership and apologize to any travelers who are inconvenienced by this decision."

Allegiant began offering offering two weekly nonstop flights to Mesa, Ariz., in November 2012, with an eye to serving as a connection between Rochester and Mayo Clinic's Phoenix campus. The 166 seats flights travel on Thursday and Sunday.

A recent study of the airport activity from July 2012 to June 2013 found that Phoenix/Mesa was the top destination from the airport. Allegiant in Rochester had 15,580 passengers during those 12 months. That accounts for 7.4 percent of the passengers in this market. For the same period, Delta accounted 44.7 percent of the airport's passengers, and American had 41.6 percent.

That same study found that Allegiant tallied about $1.4 million revenue during those 12 months.

This marks the Las Vegas-based airline's second failed attempt to serve the Rochester market. From 2008 to 2010, it offered bargain nonstop flights to Las Vegas. During 2008, 27,854 passengers flew out of Rochester to Las Vegas on Allegiant. Those flights ended in 2010 because of lack of demand.

When Allegiant returned to Rochester with a focus on Arizona, there was no concern about demand with the built-in Mayo Clinic traffic plus vacation trips.

“We’ve had good luck returning to markets that we’ve previously pulled out of. We feel good about coming back to Rochester,” said Allegiant's Fletcher in 2008.

Rochester's airport has long worked at attracting and keeping airlines, although it's hindered by lower cost flights from Minneapolis.

In August 2012, the Rochester International Airport was awarded a $500,000 grant from the U.S. Department Transportation to help attract airlines to provide direct flight service to more destinations. The Rochester City Council approved a local match of $225,000, for a total of $750,000.

The airport's application included a letter from Frontier Airlines, saying the Denver-based company would be interested in providing direct flights if Rochester could offer incentives. The airport has not added any new flights or airlines, since that grant was presented.

Mark Sixel, who did the recent study for the airport, concluded his report by saying Rochester has a large enough passenger market to support more flights. However, numbers alone may not be enough in this competitive environment.

"It is likely the Rochester International Airport will have to offer some some kind of risk mitigation program, including waivers, marketing and even ground handling to convince another airline to launch service," he wrote.

Most experts say the bottom line is that the airport likely will need to offer financial enticement of some sort to attract more service. After establishing the relationship, then the passenger numbers need to be there to keep the service.

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