Introduction
In order to review the Research and Development (R&D) efforts of the low-cost airline carrier Allegiant Air, it is first important to mention that calculating exact costs that go toward innovation because of the specific nature of the airline industry. With fluctuating demands on specific carriers and with the coming of competitors to the industry, the costs that Allegiant Air can spend on Research and Development vary from one year to another (especially depending on revenue). On the other hand, it is still possible to assess the introduction of new services that the airline provides to facilitate innovation, attract new customers, and exceed the competition.
New Routes to Unique and Underserved Destinations
As a low-cost airline, Allegiant Air can use the creation of new routes as a competitive advantage to leave its competitors, such as Spirit Airlines, JetBlue, and Southwest Airlines behind. The unveiling of unique routes, of which none have direct competition, is among the most successful R&D strategies that Allegiant has yet implemented1. By studying the market and determining which locations lack aircraft transportation, the company was the first to launch new routes to attract customers who were previously using other types of transportation. Examples of such destinations include New Orleans – Tulsa, Orlando Sanford – El Paso, Phoenix-Mesa – Santa Rosa, and nine more underserved locations.
New Facilities and Revenue Innovation Leadership
According to Bloomberg2, Allegiant Air invested in adding the development of real estate to the company’s portfolio. Allegiant is planning to build a 22-acre resort that will include a hotel, bars, and restaurants, as well as condominiums located in Port Charlotte (Florida Gulf Coast). Such a bold decision is associated with the company’s attempts to diversify its revenue as well as developing links between its airline carrier services and a luxurious destination for travel. It is essential to mention that the company’s President, John Redmond, also sees opportunities in creating Allegiant-owned brands of food and beverages, which can also be used at their restaurants or airplanes3.
It should be mentioned the new sphere of business, in which Allegiant decided to venture, is far from the usual operations of the company; therefore, further R&D is needed for the company to assess the market competition and create products that will be popular among customers. On the other hand, the new business venture presents a massive financial challenge for Allegiant, which needs to invest millions while convincing stakeholders that the opportunity will be worth the investment.
The recent report conducted by Cartawler and IdeaWorks4 concluded that Allegiant was at the top of the list of low-cost airlines that stood out for their revenue success and the quest of capturing the market’s attention. The company’s innovative approach to searching for new revenue streams will serve to Allegiant’s obvious advantage against competitors such as JetBlue, which was second on the list.
Technology for Customer Satisfaction
To follow the latest technological trends and provide potential customers with the ease of booking flights and checking in, Allegiant Air has also invested in the development of a mobile application available on the App Store and Google Play5. Research efforts implemented by Allegiant showed that the airline’s competitors have already issued mobile apps to attract passengers with a useful and convenient tool for checking in or booking flights.
Weaknesses of Allegiant’s Research and Development Efforts
Despite the fact that Allegiant Air has been extremely successful in diversifying its profits and offering clients new ways to experience its airline carrier services, there are some weaknesses from which the company can suffer. For example, Allegiant Air’s planes have higher chances of failing during their flight. As mentioned, Democrat & Chronicle,6 Allegiant’s airplanes have broken down in midair at higher rates compared to other airlines, which points to the need of the company to invest in R&D associated with the improvement of the planes’ functionality and safety.
Advantages of Allegiant’s Research and Development Efforts
Allegiant Air has been recognized as the most successful low-cost airline that managed to introduce a simple but successful strategy. Allegiant has studied the market for low-cost airline services and determined the most underserved locations that lack affordable air transportation7. Despite the fact that Allegiant has become known for its continuous efforts to charge passengers for additional services (e.g., beverages, luggage, snacks), the low-cost strategy allowed the company to become extremely successful in its sector8. Lastly, it can be concluded that Allegiant is at the top of its performance and will be diversifying its revenue to achieve a competitive advantage. However, the company should consider targeting its Research and Development efforts at the improvement of the identified disadvantages and focus on ensuring the safety of its flights. Recommendations for future R&D efforts include the optimization of in-flight amenities to make airplanes more comfortable. Also, with the prospects of creating Allegiant beverages and food, it can be effective for the company to serve new products during flights in order to advertise them and gain public recognition.
Footnotes
Allegiant Air unveils 11 unique routes. (2016).
Bloomberg. (2017). Why this airline is building a massive Florida resort. .
Bachman, J. (2017). This airline has some Florida real estate it wants to sell you. Web.
Cartawler & IdeaWorks. (2017). Allegiant Air is 2017 champ for revenue innovation leadership. Web.
Allegiant Air mobile apps. (2017).
Lash, N., Levesque, W., & Cormier, A. (2016). Allegiant Air’s planes 4 times more likely to fail during flight.
Sumers, B. (2015). Allegiant Air: The most successful airline you’ve never heard of is growing fast.
Clinton, M. (2018). Allegiant Airlines.