17 APR 2018: Allegiant Air shares continue to fall in the aftermath of a news report that is raising serious safety questions about the low-cost carrier. Allegiant is defending its safety and says the report by CBS News' “60 Minutes” tells a “false narrative” about the airline. Investors, however, fear that the negative publicity will cause travellers to avoid Allegiant, whose fleet includes many older planes that typically require more maintenance.

“60 Minutes” reported Sunday night that between January 2016 and October 2017, the Las Vegas-based airline experienced more than 100 serious mechanical incidents, including aborted takeoffs, loss of cabin pressure, and emergency landings.

CBS said that detailed reports from the Federal Aviation Administration indicated that Allegiant flights were three-and-a-half times more likely to suffer an in-flight breakdown than flights operated by American, United, Delta, JetBlue or Spirit. The report also aired a long-running accusation by the Teamsters union local representing Allegiant pilots that the airline discourages pilots from reporting mechanical problems with planes.

Allegiant blamed the story on a former pilot who was fired and has filed a lawsuit against the airline.

The airline issued a statement by Eric Gust, vice-president of operations, charging that the CBS story told a “false narrative” about Allegiant and the FAA. He said the airline complies with all FAA requirements and takes part in many voluntary safety programmes and is subject to “rigorous oversight” by the FAA.

“To suggest that Allegiant would engage in the practice of asking team members to violate company and regulatory obligations is offensive and defamatory,” Gust said.

A memo to employees stated:

"CBS produced a one-sided narrative by cherry-picking interviews and ignoring publicly-available facts. For example, the show's star interviewee, John Goglia, is not an un-biased commentator. He is a paid expert working for a former Allegiant pilot who has sued Allegiant.”

It was previously reported that Allegiant was four times more likely to report a mechanical failure mid-flight than the big three US airlines Delta, United or American.


Shares of parent company Allegiant Travel Co. fell US $3.45, or 2.3 percent, to $147.60 in midday trading Monday. They dropped 8.6 percent on Friday in anticipation of a damaging news report.

Allegiant buys used planes to keep costs down. As of Feb. 2, Allegiant operated 37 McDonnell-Douglas MD-80 planes and 53 Airbus A320 jets. It is phasing out the MD-80s, which burn far more fuel than new planes. Allegiant's used planes range between 11 and 32 years old, according to a company regulatory filing.

The CBS report updated reporting by the Tampa Bay Times, which said in 2015 that Allegiant planes were four more times likely to make an unplanned landing because of mechanical problems than those of other US airlines. None of those incidents led to enforcement action from the FAA.

The FAA on Monday released a letter in which associate administrator of safety Ali Bahrami defended the agency's performance by pointing to the lack of a fatal crash involving a US airline since 2009.

The FAA increased its monitoring of Allegiant in 2015 because of labour tension with its pilots. In 2016, the agency moved up a routine review of the airline by two years after a series of aborted takeoffs and other safety incidents. FAA officials took no enforcement action against Allegiant and said they were satisfied that the airline was addressing problems found by inspectors.

Allegiant executives termed the FAA's 2016 findings “minor” and hailed the report as evidence of the airline's safety.

email icon facebook logo twitter logo
comments powered by Disqus