By Ben Kesling
Allegiant Travel Co. (ALGT) said Monday it will acquire up to 19
Airbus A319s, a big expansion for the U.S. airline that also poses
a challenge to its low-cost status by adding a third aircraft
type.
Las Vegas's Allegiant proposed by offering ultra-cheap fares
between secondary U.S. cities and big leisure destinations like Las
Vegas with a fleet of older MD-80 planes that it picked up cheap,
but two years ago acquired larger Boeing Co. (BA) 757s to start
flights to Hawaii and elsewhere.
The move into 757s was accompanied by a delay into launching
Hawaii flights while the carrier waited for FAA approval for
extended-range operations certification and obtaining flag-carrier
status.
Allegiant said adding the A319s, which are smaller than its
existing planes, wouldn't change its business model and reflected
how cheap the plane had become.
"A319 asset values have significantly declined and now mirror
the environment we saw when we first began buying MD-80s," said
Allegiant President Andrew Levy in a statement.
Allegiant plans to rent nine A319s from the leasing unit of
General Electric Co. (GE) and "eventually" acquire another 10 from
Cebu Pacific Air of the Philippines. The first two planes are due
to enter service in the second quarter of 2013.
The U.S. carrier operates 58 MD-80s and four 757s, and owns
another two 757s.
Allegiant shares were recently down 0.3% at $69.71.
Write to Ben Kesling at: Benjamin.kesling@dowjones.com
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