Allegiant Air Took a Prepandemic Bet, and It's Paying Off

Even though it carries fewer passengers per day than the stadium that bears its name actually holds, Allegiant Air is a known brand nationwide. A leisure airline that predominantly serves smaller markets, Allegiant made a big marketing bet before the pandemic, securing the naming rights to the Las Vegas Raiders' stadium. A year later, it's paying off, as the Raiders kick off their inaugural season at Allegiant's ink-black stadium. While ratings for Sunday's game between the Raiders and Buffalo Bills remain to be seen, the stadium's first national broadcast—a Monday Night game against the New Orleans Saints—averaged 15.59 million viewers across ESPN, ESPN2 and ABC. The airline said that since signing the deal, the stadium has racked up 40.6 billion impressions, with 8 billion coming from the Saints game. In January, Allegiant expanded its routes to include flights to Boston, Houston and Chicago. And after the Monday night game, Allegiant's site traffic from those three markets were up between 60% and 80%. "It affords us flexibility going forward,” said Scott Deangelo, the airline's CMO. “It’s allowed us to reduce our [spend] by 50% inclusive of the stadium and only build back as we see demand materialize.” Deals like Allegiant's aren't without controversy, though. The Bills haven't had a sponsor since July, when apparel company New Era asked to be released from its contract. And the Saints are currently without a partner for the 2021 season after Mercedes-Benz decided to part ways in May after 10 seasons. It's unclear if these withdrawals are a direct consequence of empty arenas or overall financial hardships caused by the pandemic. But even before the pandemic, there were cases like Enron Field, where the energy company put its name on the stadium as it declared bankruptcy and subsequently folded. Still, Allegiant is pleased with the deal. “The stadium is a very efficient way to build awareness,” said DeAngelo. “Any way you slice it, it exceeded our expectations.” Unlike SoFi, which has placed a high value on its new Los Angeles stadium's real estate and the opportunity for events beyond football, the decision to partner with the Raiders was about pursuing opponents' audiences. While DeAngelo called the investment a "sizable chunk" of its marketing budget, he said it was worthwhile. “When [an opponent's] team comes to play in Vegas, those millions of fans are going to be watching, and we want to be top of mind for them,” he said. DeAngelo acknowledged that naming rights aren't perfect. Even though the brand is guaranteed shots during a game's broadcast, it's not like the airline can advertise a specific message beyond its own name. Curiosity has to bring audiences to the site. But it is easier than going market to market, buying local spots for each team and following those up with digital campaigns. It was "precise" yet cumbersome for the brand and media buying agencies. Now, the airline can get just as many impressions in one shot. And those impressions are vital, as the airline industry has been gutted by the pandemic. Allegiant has seen its revenue fall nearly 73% year over year and its schedule capacity cut in half. However, DeAngelo expects the airline to be in a "positive earning position" by early next year. Like Southwest—its largest competitor, as both serve the leisure market and neither rely on international flights—Allegiant is focused on growing new travelers by converting those that had previously flown with American and Delta. According to the airline, web traffic shows new users coming to the brand's website up 75%. DeAngelo also said the brand's market share of the industry had increased from between 1% and 2% to nearly 6% to 9%, largely because leisure travel is currently the only game in town. The investment in the stadium has allowed Allegiant to stay relevant to audiences without spending unnecessarily. But the airline is missing out on one of the larger components of naming rights deals: the fans. So far, the team has yet to play a game with actual fans in the stadium, which means Allegiant can't take advantage of fans drinking out of sponsored cups or selfies with logos posted on social media. Plans to sell fan packages of flight, hotel and game tickets have been scrapped, and the airline was even set to become the official airline of the Indianapolis Colts, which has since been pushed to next season. Fortunately for DeAngelo, the airline was able to restructure its contract with the Raiders. “It was a very painless and thoughtful negotiation,” he said. “I do expect it to only get better when fans come back.”

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Allegiant Air Took a Prepandemic Bet, and It's Already Paying Off

The leisure airline put its name on the Raiders' NFL stadium

Ryan Barwick

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Ryan Barwick