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Does it make any sense that Allegiant Air is buying locally owned Sun Country Airlines? (Front page and StarTribune.com, Jan. 12.) If you are Allegiant, it does. Allegiant is a low-cost airliner like Sun Country. However, Allegiant makes its business by providing low-cost travel from smaller cities to premiere destinations like Orlando and Las Vegas. Those smaller cities include Fargo, Sioux Falls, Des Moines, Flint in Michigan, and even St. Cloud here in Minnesota. However, Allegiant is still behind Southwest Airlines for being the No. 1 low-cost airline in the country.
Southwest essentially has dominated in part by having hubs in the second-tier airports in big cities like Dallas and Chicago. Allegiant has come to do the same in cities like Phoenix and in the Tampa Bay area. Southwest also has become dominant in numerous cities that are one tier below the major airports like in Milwaukee, St. Louis and Baltimore. Allegiant also has begun the same in cities by making bases in cities like Cincinnati and Indianapolis, although the latter is still controlled by Southwest Airlines.
Which brings us to Sun Country Airlines. As the locally based low-cost airliner, Sun Country dominates the market similar to how Delta dominates the high-tier airline market in Minnesota after buying out Northwest Airlines back in 2009. Attempts by Southwest and other low-cost airlines like Frontier Airlines to enter the market have been less than successful, although both still have small presences at the Minneapolis-St. Paul International Airport. Others like JetBlue and Spirit Airlines have left the Twin Cities altogether. In short, Allegiant Air gets a hub in a market that was not dominated by Southwest and increases its airline presence across the country in the process. A win for Allegiant for sure.
But what about passengers in the Twin Cities? Not much of a win here. Losing a locally based airline is losing a sense of identity. Sun Country dominated because of local support by travelers who wanted to support a locally based airline, especially after Northwest was bought by Delta. Sure, Allegiant will probably run the same routes and destinations that Sun Country did. But now, that will be done by an airline based in Las Vegas instead of one based in the Twin Cities.
Could it mean that Southwest and Frontier might increase their destinations from the Twin Cities if travelers decide to brush off Allegiant? Maybe. However, it could also mean that the monopoly continues with higher prices even for a low-cost airliner as a result.
And honestly, I do not see Allegiant running flights from the Twin Cities to Fargo or Des Moines or Sioux Falls to compete against Delta’s short connection service. Still, expect this buyout to happen, since Sun Country and Allegiant do not presently operate in the same regions or locations for the most part. Thus, one will just have to see what happens to the low-cost airline market in the Twin Cities when Allegiant does take over Sun Country and the purchase is finally completed.
