Small towns fuel big growth at Allegiant

02/18/2009 | Wall Street Journal, The

Allegiant Airlines is set to unveil extensive new service to Los Angeles International Airport, adding to a 21% jump in capacity already announced for the second quarter. CEO Maurice Gallagher says Allegiant is growing because of its focus on underserved small towns. "We're just not seeing the deterioration [in demand] that other people are seeing," he says. But despite Allegiant's industry-leading 11.1% operating margin, some analysts see tough times ahead. "If leisure traffic drops and fuel goes up, then these guys are toast," says Mark Roberts of Off Wall Street Consulting Group.

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