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Gaming Guru

Richard N. Velotta

Allegiant Air to discontinue service between US mainland, Hawaii

18 November 2015

Las Vegas-based Allegiant Air will say aloha to Hawaii and end its nonstop service between the U.S. mainland and Honolulu in August.

Representatives of the company announced to employees Monday and Tuesday that it would retire its Boeing 757 fleet instead of undertaking the expense of "D check" maintenance, the most thorough overhaul that aircraft undergo, normally occurring about once every six years.

Jude Bricker, Allegiant's senior vice president of planning, told Honolulu-based Allegiant employees about the plans in person on Monday. Those employees will be offered positions elsewhere in the Allegiant system.

Other employees were told at a town hall-style meeting Tuesday.

Allegiant began flying to Hawaii in 2012, initially offering its successful formula of linking resort communities with small cities. In the early going, the airline flew routes to Honolulu from Fresno and Stockton, Calif., Eugene, Ore.; and Boise, Idaho, in addition to Las Vegas. It eventually added Hawaii flights from Mesa, Ariz., and Bellingham, Wash., introducing Maui service from the Washington border community.

But Allegiant ended its Bellingham flights in September 2014 and its Mesa-Honolulu service in December that year. Now, Allegiant only flies to Honolulu from Las Vegas and Los Angeles International Airport.

Speaking on background, an Allegiant executive said a decision was reached to retire the company's five twin-engine Boeing 757 jets when they accumulate enough hours to require a D check. Considered the most rigorous maintenance event, D checks normally take about 50,000 man hours to complete, can take two months to finish and essentially involves taking the entire aircraft apart to be refurbished or have parts replaced.

Rather than bear the expense of the heavy maintenance, the company opted to retire the planes since there's virtually no aftermarket for the used 757s.

When Allegiant started Hawaii service, it had six 757s. One plane has already been retired. Three of them will be due for D checks by the beginning of the fourth quarter leading to the decision to end Hawaii service prior to the Labor Day holiday. The two remaining 757s will fly routes from Las Vegas until they reach the end of their flying cycles.

When employees got the bad news about Hawaii, they got some good news about their paychecks.

At the meeting, employees were told that the board of directors voted to pay a one-time bonus to them as a result of the company's profitable year to date. Eligible employees will receive 5% of the amount they have been paid through the first three quarters of 2015. Bonuses will only go to non-executives below the vice presidential level.

That means an employee who makes $40,000 a year would receive a bonus of about $1,500.

Bonus checks will be delivered in mid-December.

There are 470 Allegiant employees at McCarran International Airport and 724 at the company's corporate headquarters in Las Vegas. Systemwide, there are 2,944 employees. Of them, there are 19 that are vice presidents or higher that won't be eligible for bonuses.