Executive Chairman, Allegiant Travel
Search every verified Maurice Gallagher interview, podcast appearance, and on-the-record quote — each transcript cross-checked by AI and human review to confirm speaker identity. Maurice Gallagher, Executive Chairman of Allegiant Travel, spoke at a Dean's Distinguished Speaker event on September 17, 2016, where he discussed the company's business model and management philosophy. He stated that Allegiant stopped hedging fuel in 2007, explaining that the company adjusts capacity based on oil prices. Gallagher noted that the company had been profitable for 52 consecutive quarters and was operating at a 30 percent margin, which he described as "unheard of in the business." He attributed this success to a focus on leisure customers, the use of older airplanes, and cost efficiency. Gallagher also described his approach to management, saying he is "a big believer in stockholder benefits" and that none of Allegiant's management have employment agreements. He stated that he does not take a salary and that bonuses are based on performance. Gallagher discussed the challenges of scaling management as the company grew from a small commuter airline to one with 83 airplanes and 322 routes. He advised against giving too much money to young companies, saying they "don't learn how to do things inexpensively and efficiently."
“We stopped hedging in 2007. We were the first company to stop it and back then the Wall Street types it was kind of like you check a box are you hedging yes. We started looking at it and realized there are fundamental problems with hedging fuel in a business we don't know. If oil goes up strongly, we pull our capacity...”
“Our model has really been bulletproof and it has worked exceedingly well. We're fifty-two quarters profitable and lead the industry in margins. This year with oil being down, we're at 30 percent operating margins. Historically, three or four percent were good operating margins, so this is a good time for the transporta...”
“I have a very simple mantra: I'm a big believer in stockholder benefits. People invest, they want you to do things right. When we run the company right, it's our company to run; when we run it bad, the board takes over. We have a small board with diverse disciplines and have been fifty-two quarters strong in earnings.”
“None of our management have employment agreements. We pay a simple bonus based on performance, with low base salaries. You make your money on the upside. I don't take a salary; I haven't taken one for years. I'm a stockholder first and foremost.”
“The airline business was all point-to-point before deregulation. The natural evolution was hub-and-spoke, like FedEx choosing Memphis as a hub for its central location and good weather. We've been fortunate to be feeders to that hub system and have grown from a small commuter airline to a company with 83 airplanes, 111...”
“The twist in our business model was to focus on leisure customers who are price sensitive, flying older airplanes less frequently, and keeping all airplanes in one place for cost efficiency. This is 180 degrees different from other airlines and has proven successful.”
“The hardest part of business growth is scaling management. Running 80 airplanes requires completely different management skills than running five. We've been through three management teams and had to make tough decisions to keep up with growth.”
“The airline industry has undergone consolidation and renovation, which has been good for the industry. Consumers may not think so, but the big airlines like Delta, American, and United are doing exceptionally well and can invest in new airplanes and improve products.”
“The consumer today is upset about information that isn't well disseminated because of the architecture of global distribution systems. For example, you might buy a ticket on Expedia and not be told about bag fees until you get to the airport. In our case, you can't get our stuff except on our website, so you never have...”
“The worst thing you can do to a young company is give them too much money because they don't learn how to do things inexpensively and efficiently. We made our own furniture when we started. Start small, figure out if your product has a place in the marketplace, be honest with yourself, and start in your garage if you h...”
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