Guest Editor Joel Chusid
Watch Your Vowels
With millions of passengers flying every day, some are bound to end up at the wrong destination. I’m not talking about diverted or cancelled flights, or even what airlines call “misboards” when someone board the wrong airplane by mistake which, despite all the security regulations and precautions, still occasionally happens. But booking the wrong destination can happen, especially with so many people booking online. There are multiple cities in the U.S. with the same name (Bloomington, Lafayette and Springfield come to mind), but globally there are Londons in Canada and England and Panama Cities in Florida and Panama, and many more examples. Spelling and pronunciation errors can cause someone going to Oakland, California to end up in Auckland, New Zealand or the wrong La Paz, in Mexico or Bolivia. Airline staff are used to this, but they make mistakes, too. An Australian couple bound for the World Cup in Salvador, Brazil this past summer, ended up in San Salvador in El Salvador due to an airline booking error and had to watch the game on TV instead. An American dentist and his partner, anxious to see the Alhambra booked a first class vacation trip to Granada, Spain through British Airways last year. Upon landing in London, they proceeded to their connecting flight to Grenada, with that single vowel causing the mixup. Twenty minutes into the flight, they noticed their flight on the inflight map was headed out over the ocean, at which point they were past the point of no return. Nine hours they later ended up on the island of Grenada in the Caribbean. Since the dentist had a conference in Lisbon, Portugal at the end of the vacation, they flew to Miami and on to London. The little vowel error caused them to be on seven flights over three days and spend over $34,000 in airfares and in lost salary, for which the dentist sued British Airways since their agent erred. The case was finally dismissed last month in a Washington court. Let this be a lesson to you: watch your vowels.
The Game Plane
Are you into game shows? Is your idea of a comfortable airline seat in your living room? Here’s a new one for you, courtesy of Allegiant Air. For the past few months, “The Game Plane”, with reality host by Mark L. Walberg has been filming with somewhat captive audiences live on scheduled flights. Broadcasts in syndication began September 20, with real passengers as contestants getting chances to win prizes such as hotel stays in Las Vegas, Orlando and Hawaii. Now if you haven’t heard of Allegiant, they are what can be described as a niche, yet successful, airline, serving smaller cities to leisure destinations usually a few times a week. Think Shreveport to Las Vegas, one of the chosen routes for the game. The games range from “Bye Bye Birdie” (an inflight putting contest), the “Barf Bag Challenge” (choose questions from an array of air sickness bags) to “How Smart is Your Co-Pilot” (one half of a couple is sent to the isolation booth- the airplane lavatory). For some sample pictures, see http://gameplane.herokuapp.com/. Now I have no idea how they deal with turbulence….
Airline Food, Grounded
Some international travelers prefer to eat their meal on the ground before a red-eye flight to maximize rest time, especially when heading eastbound where hours are lost. Indeed, some airline lounges offer premium travelers pre-flight fine dining, especially those in the Middle East where most long haul travel involves an overnight, and even on the U.S. East Coast where most flights to Europe are scheduled to leave in the evening and arrive early. On recent flights on Turkish and Qatar Airways I was blown away by the selection of food, with everything from chefs to olive bars. But now we’re talking about airline food on the ground when you’re not even taking a flight. LSG SkyChefs, in partnership with Allyouneed.com, a German delivery site, has just introduced a test of home airline meal delivery in Germany, Cologne and Dusseldorf, to be exact. The meals are designed after Lufthansa business class meals, are prepared fresh, not frozen, and delivered to homes once a week, on Wednesdays. The meals, however, can be frozen and eaten later and feature both vegetarian and regular entrees, whatever is being served aloft on that day.
On the other hand, you can do what a “wanna-be” passenger did at Munich, but got caught, similar to what a man did at a Chinese airport for months. The European traveler bought a one way business class ticket from Munich to Zurich. The distance of this flight is only 162 miles. I flew this segment some years ago, and it took longer to get the checked baggage than the flight itself. However, these tickets are relatively expensive, at $895 (yes, you read that correctly), but they permit unlimited cancellation and rebooking without penalty. They also permit access to the premium lounge at Munich, which the guy used 35 times, without ever flying. Each time he checked in, helped himself to the copious food and drink, and then had his ticket refunded and reissued. After a few months of this, airline staff got suspicious, and Lufthansa took the freeloader to court. He was fined $2700, equal to the daily lounge charge.
“Keep Calm and Watch”
With all the stories of “air rage” these days, British Airways has discovered some ways to calm passengers and mesmerize them to relax on long flights. Last spring the airline introduced what one could only call “boring” movies. How about watching a seven hour trail ride to Oslo, or hours of bird feeding or knitting? A British Airways spokesperson equated it with watching the moving flight map. Just recently, a new channel, “Paws and Relax” was introduced, featuring romping dogs and cats. Think “Puppy Bowl” – non-Super Bowl watchers know that at the same time the big game is on, the Animal Planet channel shows the “Puppy Bowl” with furry juvenile canines playing with toys and each other on a little sports field. British Airways also recently tested a “Happiness Blanket” on some travelers between New York and London. A headband worn by the traveler measures electrical fluctuations of the brain, and the blanket turns blue when the user is calm, red when they are anxious or stressed. The blankets were used during mealtime, entertainment and sleep. No idea if this idea is going to be expanded. Some pictures here: http://www.britishairways.com/en-gb/offers/partners/happiness-blanket
Allegiant Air‘s (Las Vegas) pilots, represented by the Airline Professionals Association Teamsters Local 1224, have issued this statement:
Pilot attrition is accelerating at Allegiant Air as pilots, even senior captains with many years invested, have been leaving in increasing numbers for companies luring them with better and safer operations, better working conditions, better schedules and increased compensation and benefits packages.
A significant number of pilots have recently left and more indicate they are planning to leave Allegiant Air in pursuit of greener pastures. Flights have been cancelled and Allegiant Air continues to deploy sub service due to a lack of crews to fly their airplanes. The airline’s management and investors should equally be concerned with pilot attrition, as it has a direct impact on the operation.
Not only is Allegiant Air having trouble retaining qualified pilots, but the management team is struggling to replace the losses by attempting to hire from a dwindling pool of qualified candidates who, once exposed to the realities of employment at Allegiant Air and the difficult relationship with an anti-union management team, often elect to leave as well.
Even as the number of new hires replacing former pilots at the airline is steadily climbing, some new hires elect not to show up for training.
The accelerating loss of pilots is not a sustainable model for the company, it’s not favorable for shareholders, and it certainly doesn’t offer perks for the remaining pilots on payroll. Already flying full schedules, some of the remaining pilots are finding themselves forced into covering additional flights, keeping them away from home for weeks and even months at a time.
The pilots, and the union representing them, are urging the management team to address the underlying conditions at the root of the crew shortage.
“Addressing several key issues would go a long way towards stemming the company’s losses,” said Teamsters Local 1224 President Daniel Wells, speaking on behalf of the Allegiant Air pilots. “The Teamsters have presented the company with a comprehensive proposal, to which they have refused to reply. The proposal addresses key and legitimate concerns held by the Allegiant Air pilots. An honest effort by the company to reach an agreement during contract negotiations would have a positive effect, stem the unsustainable losses they are experiencing, and allow the company to succeed going forward.”
In August 2012 the pilots overwhelmingly voted for Teamster representation. Following the union vote, working conditions at Allegiant Air began to plummet. Many pilot benefits were reduced below prior negotiated levels, resulting in a lawsuit and a court-ordered injunction against the company which directed Allegiant Air to restore benefits to previous levels.
“We want to work with the management team at Allegiant Air to build an airline where pilots will want to come and stay,” said Wells. “It’s time to stop spending money fighting in Federal Court and blaming government regulatory agencies for operational challenges.”
The pilots have taken their concerns to management and repeatedly extended their assistance to help Allegiant Air become a sustainable, successful airline. However, offers for a team effort and support from the pilots are met with disregard and disdain.
The union has begun surveying pilots who are leaving Allegiant Air in order to best identify and trend the causal factors leading to a pilot’s decision to leave. As soon as enough statistical data has been documented to ensure sound statistics, the pilots intend to present the data to their management team in another effort to stem meaningful change.
The Airline Professionals Association Teamsters Local 1224 is affiliated with the International Brotherhood of Teamsters Airline Division and represents nearly 4000 members among 11 air carriers that operate both passenger and cargo aircraft. Local 1224 is the certified bargaining unit that represents all flight crew members employed by ABX Air, Inc., Allegiant Air, Atlas Air, Inc., Brendan Airways, LLC, Horizon Air Industries, Inc., Hyannis Air Services, Inc., Kalitta Air, LLC, Kalitta Charters II, LLC, Miami Air International, Omni Air International, Silver Airways Corporation, and Southern Air, Inc.
Allegiant has not yet responded with a public statement.
Copyright Photo: Jay Selman/AirlinersGallery.com. Allegiant Air McDonnell Douglas DC-9-83 (MD-83) N881GA (msn 49708) arrives at the Las Vegas base.
Allegiant Air (Las Vegas) announced, in partnership with Alpine Labs, the premiere of THE GAME PLANE, the world’s first game show to be filmed entirely in-flight with real passengers competing in real time to win prizes on the spot.
Part quiz show, part game of chance, THE GAME PLANE features Allegiant passengers on their way to vacation, competing for thousands of dollars in prizes, including all expenses-paid vacations at Las Vegas’ most popular luxury resort properties, airfare to Honolulu on Allegiant, Las Vegas show tickets and more. THE GAME PLANE is produced by Alpine Labs and filmed in-flight on Allegiant scheduled service.
“Allegiant prides itself on being an innovator in the airline industry, so the opportunity to be a part of the first-ever in-flight game show is a perfect fit,” said Brian Davis, Allegiant Travel Company Vice President of Business Development. “The energetic, fun atmosphere of the show is an extension of our vacation-focused brand, and the amazing prizes won by the contestants — our passengers — highlight all of the amazing things our destinations have to offer.”
“We are thrilled to partner with Allegiant on this amazing opportunity to showcase a whole new setting for the game show,” said Alpine’s Kevin Abrams. “Our goal is to remind viewers how much fun going on vacation is and that there are still exciting new ways to visit the game show format. THE GAME PLANE is an example of how we are introducing an original take on production.”
The show will premiere on September 20, 2014 and will air in over 75 percent of U.S. television markets on a syndicated network of stations led by the CBS Television Stations group.
Copyright Photo: Alpine Labs. Host Mark L. Walberg started his television career as an assistant at Dick Clark Productions and quickly moved in front of the camera as the announcer for the popular game show Shop Til You Drop and then as host of Burnt Toast, a sports magazine show on ESPN. It was there that the late Brandon Tartikoff noticed his work, and that association produced the nationally syndicated The Mark Walberg Show. Since then, Walberg has hosted and been featured in an array of popular talk, reality competition, and game shows, including the FOX hit The Moment of Truth. He also has hosted home improvement competitions The Mansion and House Rules, knowledge quiz shows Test the Nation and Russian Roulette, and won The Weakest Link as a contestant playing for charity. He also hosted the relationship challenge Temptation Island. Realizing a long-held ambition to produce, Walberg created and produced Sunday Dinner, the first original series for the Odyssey Network, with long-time friend and television personality Mark DeCarlo (Curb Your Enthusiasm, Jimmy Neutron).
In addition to his successful television career, Walberg believes strongly in devoting time to create opportunities for young people. Currently he is on the board of directors of Goodwill of Southern California. He’s proud to be part of an organization that is instrumental in providing hope and new futures for people who need help. He also is very involved with The Young Americans, a musical performance youth group that tours the world offering music workshops in underserved schools. In addition to Walberg, alumni include actor Tim Bagley (Grimm) and actress Nia Peeples (The Young and the Restless) He has completed production on a feature-length documentary about The Young Americans’ work. Says Walberg, “The personal transformation that happens to people when they are given the ability to express themselves through the arts, specifically music and dance, is inspiring.”
Allegiant Air (Las Vegas) will not be renewing Hawaii service from Bellingham, Washington this coming winter according to the Bellingham Herald. The airline has reduced its full-year Hawaiian flying from Honolulu to only two mainland points; the Las Vegas base and Los Angeles. Other destinations (Boise, Eugene, Fresno, Mesa, Spokane and Stockton) will continue to have seasonal service to Honolulu but the number of flights has been dropping since the peak.
Read the full report: CLICK HERE
Copyright Photo: Eddie Maloney/AirlinersGallery.com. Boeing 757-204 N902NV (msn 26964) lands in Las Vegas.
Allegiant Air (Las Vegas) has announced a new initiative to encourage paperless boarding throughout its network, saving passengers time and money. Beginning tomorrow, September 2, 2014, customers who require the assistance of a ticket agent to print their boarding pass at the airport will pay a $5 charge per boarding pass printed. Customers who use a mobile boarding pass on their mobile device or tablet, or check-in online and print their boarding pass at home will save themselves the small fee, while helping the carrier keep fares low and ticket lines short.
Throughout 2013, Allegiant worked with many small and mid-size airports throughout its system to introduce mobile boarding pass scanners at the security checkpoints in every airport the carrier serves. Fifty-five of the airports Allegiant serves did not previously have scanners in place. Allegiant purchased scanners for these airports, worked with the airports and TSA to have them approved and installed and reached out to other carriers serving the airports to ensure that the mobile boarding pass scanners the company installed could be used by other airline passengers.
Travelers can avoid paying $5 to have their boarding pass printed at the airport by checking-in online or on the Allegiant2Go mobile app and using express bag drop or proceeding directly to the gate. Through the Allegiant2Go mobile app, available for free on Apple and Android mobile devices, customers may check-in for their flight 24 hours prior to scheduled departure, add seat assignments, priority boarding or additional baggage and receive their boarding pass directly on their phone or tablet. The mobile boarding pass option will save travelers the time and trouble of waiting in ticket counter lines.
This charge does not apply to passengers who are ineligible for advance check-in such as passengers traveling with pets in the cabin, or to passengers with disabilities who are unable to print or download boarding passes.
Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N881GA (msn 49708) departs from Las Vegas.
Allegiant Air (Las Vegas) has announced new, nonstop jet service on five new Florida routes, including one route each to Punta Gorda and Sanford (near Orlando) and three to St. Petersburg/Clearwater (Tampa Bay).
New routes announced include:
Nonstop service to St. Petersburg-Clearwater International Airport (PIE) from:
Belleville, Illinois – begins November 19, 2014
Bloomington, Illinois – begins November 21, 2014
Concord, North Carolina (near Charlotte) – begins November 13, 2014
Nonstop service to Orlando-Sanford International Airport (SFB) from:
Peoria, Illinois – begins November 14, 2014
Nonstop service to Punta Gorda Airport (PGD) from:
Huntington, West Virginia – begins Nov. 20, 2014
Allegiant differs in many ways from other U.S. airlines. The company is focused on low-cost, nonstop leisure travel, providing customers with low base fares while giving passengers the option to pay for the amenities they want, like luggage, seat assignments and priority boarding, without including the cost of things they don’t need in the price of the ticket.
Allegiant’s innovative business model has allowed it to grow from one airplane and one route 15 years ago, to offering access to low-cost, nonstop travel in more than 90 communities nationwide. This year, Allegiant has inaugurated service on 16 new routes to popular U.S. vacation destinations. Additionally, the company recently announced its 46th consecutive quarter of profitable operation while keeping its average one-way fare under $100.
Copyright Photo: Keith Burton/AirlinersGallery.com. The Airbus A319s and A320s are based at Sanford. Former easyJet Switzerland Airbus A319-112 HB-JZN (man 2387) became N302NV with Allegiant.
Routes from Sanford. Allegiant operates nonstop routes to SFB from small underserved markets from the eastern half of the United States to the vacation Orlando area destination.
Allegiant Air (Las Vegas) today announced new, nonstop service from Cincinnati to Las Vegas beginning on December 18.
The new flights will operate twice weekly between the Cincinnati/Northern Kentucky International Airport (CVG) and Las Vegas McCarran International Airport (LAS) beginning on Thursday, December 18, 2014. This announcement brings the total number of destinations served by Allegiant from CVG to seven, including service to Fort Lauderdale/Hollywood and Mesa (near Phoenix) announced just last month.
Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N424NV (msn 49421) departs from Las Vegas McCarran International Airport.
Allegiant Travel Company (Allegiant Air) (Las Vegas) reported net income of $33.5 million for the second quarter 2014, ending on June 30, up 29.8 percent from the previous second quarter net profit of $25.8 million in 2013.
“We are very proud to report our 46th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We have been working very hard to mitigate the crew training issues that have impacted us in the past two quarters. Although these issues did contribute to operational inefficiencies and incremental costs during this past quarter we are trending in the right direction and hope these issues have minimal impact in the third quarter. On a much more positive note, in June we completed multiple aircraft transactions to add 14 additional aircraft to our future fleet and raised $300 million of debt in the high yield market with very competitive terms. We could not have done this without the tremendous effort of our Team Members.”
Notable company highlights:
Increased operating margin, EBITDA margin and return on capital employed versus the same time last year
Acquired 12 incremental A319 Airbus aircraft for delivery in 2018. See table below for financial impact of this transaction
Signed agreements to acquire one A320 and one A319 to be in service in 2015 and 2016, respectively
Entered into a letter of intent to purchase eight A319s, previously committed to under operating leases.
Two of these are currently under operating lease to Allegiant, one is expected to be delivered in 2014 and five are expected to be delivered in 2015
In-service Airbus fleet of 10 aircraft accounted for 21.9 percent of total ASM production during the quarter
Prepaid $121.1 million, 5.75 percent term loan facility due 2017
Raised $300 million, 5.50 percent senior unsecured notes due 2019, corporate rating of BB- by Standard & Poor’s and Ba3 by Moody’s
Raised $85.3 million collateralized by 53 MD-80 and six 757 aircraft
Initiated service on 12 new routes in the second quarter
Named Top-Performing Airline in North America by Aviation Week for third consecutive year. The Company also has the best five-year average score of any airline worldwide, 76.9, more than 5 points higher than the second-ranked carrier
Read the full report: CLICK HERE
Copyright Photo: The fleet will grow by 10 aircraft (mainly Airbus A319s and A320s) in the next two years while the Boeing 757s remain constant at six aircraft. Boeing 757-204 N903NV (msn 26966) is tugged off the gate at Los Angeles International Airport.
Allegiant Air (Las Vegas) has announced new, nonstop jet service from Cincinnati-Northern Kentucky International Airport (CVG) to Fort Lauderdale/Hollywood beginning on October 9, 2014 and Mesa (near Phoenix) beginning on November 12, 2014. In addition, Allegiant will also add additional weekly flights to Sanford (near Orlando), St. Petersburg/Clearwater and Punta Gorda all in Florida.
Allegiant began its service at Cincinnati-Northern Kentucky International Airport in February 2014 with nonstop flights to Sanford. The carrier has since added nonstop flights to two additional Florida vacation destinations as well as seasonal summer service to Myrtle Beach, South Carolina. This announcement will more than double Allegiant’s footprint at CVG, increasing from seven weekly flights to 18, serving six destinations. Cincinnati is the fastest-growing origination city in Allegiant’s 15-year history, and the carrier attributes the expansion to the overwhelming demand for low-cost, nonstop flights to leisure destinations.
The new flights to Fort Lauderdale/Hollywood will operate four times weekly between Cincinnati-Northern Kentucky International Airport (CVG) and Fort Lauderdale-Hollywood International Airport (FLL). The new flights to Mesa will operate twice weekly between Cincinnati-Northern Kentucky International Airport (CVG) and Phoenix-Mesa Gateway Airport (AZA).
Copyright Photo: Ton Jochems/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N876GA (msn 53469) sets down at the Las Vegas base.
Allegiant Travel Company (Allegiant Air) (Las Vegas) has announced three separate aircraft transactions for 14 additional growth aircraft and a fourth transaction for the purchase of two leased aircraft and the conversion of future operating lease obligations to forward purchases.
“We continue to find purchase transactions for high quality Airbus aircraft to secure our future growth,” said Andrew C. Levy, Allegiant Travel Company President and Chief Operating Officer. “We will now have 32 Airbus series aircraft, all owned, in our fleet by the end of 2018. We expect to use debt financing along with cash reserves to purchase these aircraft. Importantly, the additional A320/A319 aircraft are all sister ships to aircraft we currently operate. We remain active in the used Airbus market and hope to add more aircraft to our fleet during 2016 and 2017.”
The company has agreed to purchase twelve Airbus A319 aircraft currently leased to a European carrier until 2018. This purchase transaction is expected to be completed by the end of June. As each aircraft lease expires, Allegiant will transition the aircraft into its operating fleet. Allegiant expects to recognize approximately $30 million in annual lease revenue beginning in June 2014 through 2018 and plans to assume $142 million of secured debt under this transaction. The remaining two growth aircraft – one A319 and one A320 – will be purchased in 2015 and 2016 upon aircraft delivery.
The company has also agreed to purchase the two currently leased A319 aircraft in its fleet. This purchase is expected to be completed in July. The remaining six aircraft under the lease agreement executed in 2012 will be purchased at the time of delivery to Allegiant, expected to be in late 2014 through 2015.
The company expects its capital expenditures (CAPEX) to be approximately $315 million in 2014 and approximately $220 million in 2015. Upon completion of the above transactions, the company’s fleet plan will be as follows:
Airbus A319-100 (156 seats) will grow to 22 aircraft by 2018
Airbus A320-200 (177 seats) will grow to 10 aircraft by the end of 2015
Boeing 757-200 (215 seats) will remain at 6 aircraft through 2018
McDonnell Douglas MD-80 (DC-9-82s, DC-9-83s and MD-88s) (166 seats) will remain at 53 aircraft through 2018 (Allegiant is not expected to add any more MD-80s)
Overall the fleet will grow from the current 70 aircraft to 91 aircraft by 2018
This plan and guidance is subject to revision.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A319-112 N302NV (msn 2387) prepares to touch in Los Angeles.
Allegiant Air (Las Vegas) on June 6 started seasonal nonstop jet service between Great Falls, Montana and Los Angeles. Allegiant now operates Great Falls’ only nonstop service to Los Angeles in addition to Las Vegas and Mesa (near Phoenix). The new flights will operate twice-weekly through September 8, 2014.
The company on June 6 also inaugurated new nonstop, seasonal jet service between Cedar Rapids, Iowa and Los Angeles via Los Angeles International Airport.
As is customary on new Allegiant routes, the new flights will initially operate twice weekly, beginning through September 8, 2014, flying nonstop from The Eastern Iowa Airport (CID) to Los Angeles International Airport (LAX) and becoming the only nonstop service from Cedar Rapids to any destination in California.
Copyright Photo: Jacques Guillem Collection/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N416NV (msn 49555) holds for runway clearance for its departure from the Las Vegas base.
Allegiant Air (Las Vegas) yesterday (June 5) celebrated the start of nonstop seasonal jet service between Kalispell, Montana and Los Angeles. Kalispell is the gateway airport for Glacier National Park.
Los Angeles becomes Allegiant’s third destination from Kalispell, joining current flights to Oakland and Las Vegas. The new flights will operate twice weekly between Glacier Park International Airport (FCA) and Los Angeles International Airport (LAX) beginning today through September 7, 2014.
In addition, Allegiant yesterday (June 5) also launched seasonal nonstop jet service between McAllen, Texas and Los Angeles. McAllen serves the southern Rio Grande Valley and South Padre Island.
Allegiant offers McAllen’s only nonstop services to Las Vegas, Southern California and Florida. The new flights will operate twice weekly between McAllen-Miller International Airport (MFE) and Los Angeles International Airport (LAX) through September 7.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. McDonnell Douglas DC-9-83 N880GA (msn 49625) approaches the runway at Los Angeles International Airport (LAX).
Allegiant Air (Las Vegas) yesterday (May 31) started nonstop, seasonal jet service from Cincinnati-Northern Kentucky International Airport to Myrtle Beach. The new flights will operate two times a week until August 11, 2014, flying nonstop from Cincinnati-Northern Kentucky International Airport (CVG) to Myrtle Beach International Airport (MYR). Myrtle Beach becomes the fourth destination available to Allegiant travelers flying out of CVG, including Sanford, Punta Gorda and St. Petersburg/Clearwater.
In other news, Allegiant Travel Company also announced it has borrowed $40.0 million under a loan agreement with CIT, secured by six Boeing 757-200 aircraft (above) and twelve RB211 engines. The notes payable issued under the loan agreement, bear interest at a floating rate based on London Interbank Offered Rate (LIBOR). The term of the loan is 48 months and the proceeds are to be used for general corporate purposes.
Copyright Photo: James Helbock/AirlinersGallery.com. Allegiant’s Boeing 757-204 N906NV (msn 27236) approaches the runway at Las Vegas.
Allegiant Air (Las Vegas) today (May 29) began new nonstop, seasonal jet service between Lexington, Kentucky and Myrtle Beach, South Carolina. The new flights operate twice weekly beginning today through August 10, 2014, flying nonstop from Lexington’s Blue Grass Airport (LEX) to Myrtle Beach International Airport (MYR) and becoming the only nonstop service from Lexington to any destination in South Carolina.
Allegiant first began service at Blue Grass Airport in November 2008 with nonstop service to Sanford and today serves five vacation destinations from the airport including Sanford, Punta Gorda, Fort Lauderdale/Hollywood, St. Petersburg/Clearwater and Myrtle Beach. Lexington becomes one of eight Allegiant cities with nonstop service to Myrtle Beach, including four new cities in 2014.
In addition, Allegiant today also began new nonstop, seasonal jet service from Columbus, Ohio to Myrtle Beach. The new flights will operate three times a week until September 7, 2014, flying nonstop from Rickenbacker Charter Terminal (LCK) to Myrtle Beach International Airport (MYR). Myrtle Beach becomes the fourth destination available to Allegiant travelers flying out of Rickenbacker.
Allegiant first began service at Rickenbacker Charter Terminal in October 2012 with nonstop service to Sanford. In the last year and a half, Allegiant has added nonstop service to both St. Petersburg/Clearwater and Punta Gorda and has carried more than 15,000 passengers between Columbus and the company’s sunny destinations. Columbus becomes one of eight Allegiant cities with nonstop service to Myrtle Beach this summer.
Finally, the company operated its first nonstop flight between Syracuse and Myrtle Beach. The new nonstop flights will operate twice weekly between Syracuse Hancock International Airport (SYR) and Myrtle Beach International Airport (MYR). Myrtle Beach becomes the second destination offered to local Allegiant travelers after less than a year in the Syracuse market.
Allegiant first began service at Syracuse Hancock International Airport in November 2013 with nonstop service to St. Petersburg-Clearwater International Airport.
Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N874GA (msn 49643) approaches the runway at Las Vegas McCarran International Airport (LAS).
Allegiant Air (Las Vegas) on May 15 started three new routes and restarted another:
Allegiant restarted nonstop jet service between Colorado Springs and Mesa via the Phoenix/Mesa Gateway Airport. The service will operate twice weekly and becoming the only nonstop service from Colorado Springs to any destination in Arizona. Allegiant first began service at Colorado Springs Airport in February 2002 with nonstop service to Las Vegas and previously offered service to Mesa from 2010 to 2012. Mesa joins Las Vegas as Allegiant’s second nonstop destination from Colorado Springs.
Additionally at Mesa, Allegiant launched the first nonstop flights between Stockton and Mesa via Phoenix/Mesa Gateway Airport. The new nonstop flights will operate twice weekly. Mesa becomes the third destination offered to Allegiant travelers flying out of Stockton. Allegiant first began service at Stockton Metropolitan Airport in June 2006 with nonstop service to Las Vegas. Since then, Allegiant has added nonstop seasonal flights to Honolulu.
In the East, Allegiant also started nonstop, year-round jet service from Cincinnati to St. Petersburg/Clearwater. Allegiant originally announced the route as seasonal nonstop service on March 4, 2014, and after seeing overwhelming demand for the flights, decided to offer the flights year round. The twice weekly service to the Tampa Bay area is the carrier’s third route from the CVG Airport. Allegiant currently flies to Sanford (near Orlando) and Punta Gorda. Finally on May 15,
Allegiant started new nonstop, low-cost air service from Asheville to Palm Beach, a new Allegiant destination. The new nonstop flights will operate twice weekly between Asheville Regional Airport (AVL) and Palm Beach International Airport (PBI). Palm Beach becomes the fifth destination offered to Allegiant travelers flying out of Asheville. Allegiant currently flies to St. Petersburg/Clearwater, Sanford (Orlando), Fort Lauderdale/Hollywood and Punta Gorda. Allegiant first began service at Asheville Regional Airport in November 2011 with nonstop service to Sanford. Since the start of operations in Asheville, Allegiant has taken more than 60,000 passengers on vacation.
Copyright Photo: Steve Bailey/AirlinersGallery.com. McDonnell Douglas DC-9-82 (MD-82) N406NV (msn 49900) taxies past the camera at Boeing Field-King County Airport (BFI) in Seattle in the old 2003 livery.
Allegiant Air (Las Vegas) will celebrate World Wish Day by donating $1 to Make-A-Wish®, up to $10,000, for every itinerary booked with the airline today (Tuesday, April 29). The company recently celebrated the donation of its 100th Make-A-Wish® flight since teaming up with Make-A-Wish in May of 2012.
“Allegiant is thrilled to provide additional resources to the charity through our World Wish Day donation campaign and is honored to have provided air travel for 100 inspiring Make-A-Wish families,” said Andrew C. Levy, Allegiant Travel Company President and Chief Operating Officer. “Allegiant team members are passionate about making vacation possible for the 99 communities that we serve. Our ongoing relationship with Make-A-Wish expands on that mission by making more wish trips possible for the families helped by Make-A-Wish.”
The 100th wish flight recipients, Jonea, age 5, and Takiya, age 17, and their families, travelled with Allegiant from Rockford, Ill. to Orlando on April 7, for a week-long, magical wish experience. Both the Chicago-Rockford Airport (RFD) and Orlando Sanford International Airport (SFB) hosted celebratory parties for the families. To watch their life-changing wish trip journey visit: http://gofly.us/wf0n3.
Air travel is a critical resource for Make-A-Wish, with three out of every four wishes requiring air travel. Allegiant’s first Make-A-Wish flight took place in August of 2012, and the company currently averages six Make-A-Wish flights per month. This World Wish Day initiative will provide additional resources to the charity while offering customers the company’s best travel deals.
“We are extremely happy to team up with Allegiant as they continue to help us grant wishes that help wish kids feel better, and in some cases, get better,” said David Williams, president and CEO of Make-A-Wish America. “This relationship allows wish kids and their families in cities of all sizes to travel directly to incredible wish destinations throughout the country for their wish.”
Since teaming up with Make-A-Wish in May of 2012, Allegiant has provided more than $250,000 worth of donated wish travel for 100 families traveling to their wish destinations and more than $150,000 in cash sponsorships for Make-A-Wish events across the country. The airline also commemorated their relationship with the charity by painting a newly acquired Airbus A320 aircraft with a Make-A-Wish-branded livery and continues to donate $1 from every inflight purchase of their Wingz Kids Snack Pack to the organization. With service in nearly 100 communities, including popular family vacation destinations such as Orlando, Southern California and Hawaii, Allegiant is looking forward to continuing to support the life-changing efforts of Make-A-Wish.
Copyright Photo: Allegiant Air. On February 11, 2014 Allegiant Air unveiled its Make-A-Wish-branded Airbus A320-214 N218NV (msn 1229) into service at a ceremony in Sanford, Florida (near Orlando) (the aircraft was painted in December 2013). The airline celebrated by presenting a $10,000 check to Make-A-Wish, for the 10,000 shares of its plane painting video (see below).
Allegiant Travel Company (Allegiant Air) (Las Vegas) reported net income of $34.2 million for the first quarter, up 7.2 percent from the same quarter a year ago. The travel company issued the following financial results for the first quarter 2014, as well as comparisons to prior year equivalents:
“We are very proud to report our 45th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We are pleased to produce another profitable quarter despite significant operational challenges and unusually high one-time costs that impacted our overall financial performance. This was a very difficult operational quarter as we navigated through significant flight crew availability issues stemming from external factors that occurred last year. I am happy to report that our Team Members overcame this adversity and pulled together another solidly profitable quarter.”
Notable company highlights:
Integrated A320 aircraft into scheduled operations. Ended the quarter operating three A319 and seven A320 aircraft
A319 and A320 fleet accounted for 17.9 percent of total ASM production during the quarter
Integrated two MD-80 aircraft configured with 166 seats to the fleet in March. Ended the quarter operating 53 166 seat MD-80 aircraft
Completed the reconfiguration of the 757 fleet from 223 seats to 215 seats and added six Giant Seats per aircraft
Announced a seasonal base in Myrtle Beach, SC, which will support two aircraft beginning in late May
Announced 12 new routes to begin operation in the second quarter
Returned $114 million to shareholders through share repurchases and a special dividend paid in January
In April, prepaid $121.3 million term loan facility using unrestricted cash and proceeds from a new $45.3 million loan through Wells Fargo Bank, collateralized by 53 MD-80 aircraft
Read the full report: CLICK HERE
Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N420NV (msn 49424) brings another group of vacationers to the Las Vegas base.
Allegiant Air (Las Vegas) has announced the addition of several larger, more comfortable seats, known as “Giant Seats,” to each of its Boeing 757 aircraft. Giving Allegiant travelers a new option when customizing their vacation experience, the company will offer these Giant Seats on flights between Hawaii and several western U.S. cities.
Copyright Photo: Allegiant Air.
Passengers who purchase a Giant Seat when making their reservations will take advantage of a more spacious, wider seat, comfortable headrests and more leg room.
“By adding these new Giant Seats, Allegiant passengers will enjoy the feeling and comfort of a premium seat, while flying to their destination at an affordable cost,” said Jude Bricker, Allegiant Travel Company, Senior Vice President of Planning. “We think the Giant Seats will be a welcome option for travelers, especially on our long-haul flights to Hawaii.”
Located in the first row and the mid-cabin emergency exit row of the aircraft, each of the six Giant Seats will be made available for a seat assignment fee on all flights to and from Hawaii and select flights to Las Vegas.
Allegiant installed the first of these new seats as part of compliance with changes to FAA crew rest rules, which require minimum seat requirements for augmented crews resting in the passenger cabin. A pair of the new seats was installed to comply with these rules, but the company also saw an opportunity to offer these more comfortable seats to passengers in other parts of the cabin and on flights that do not require augmented crew rest.
The new Giant Seats are part of an overall reconfiguration of the Allegiant 757 cabins, which includes creating a new seating option called “Legroom +.” Increasing the amount of leg room by up to six inches, Legroom + seats provide passengers with up to 34 inches between seat rows.
The installation of the new Giant Seats has been completed on all six of the carrier’s 757 aircraft. The new seat configuration will decrease the total number of seats in Allegiant’s Boeing 757s from 223 to 215.
Top Copyright Photo: Eddie Maloney/AirlinersGallery.com. Boeing 757-204 N904NV (msn 26967) touches down in Las Vegas.
Due to demand, Allegiant changes the new Cincinnati-St. Petersburg/Clearwater route to year-round service
Allegiant Air (Las Vegas) has expanded scheduled service between Cincinnati and St. Petersburg/Clearwater from seasonal summer service to year-round.
Nonstop flights from Cincinnati/Northern Kentucky International Airport (CVG) to St. Petersburg-Clearwater International Airport (PIE) will begin on May 15, 2014.
Allegiant first took flight from Cincinnati/Northern Kentucky International Airport on February 12, 2014, with service to Sanford (near Orlando), and shortly thereafter, celebrated the start of service to Punta Gorda on February 14, 2014.
Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N868GA (msn 49554) departs from Las Vegas.
Allegiant Air (Las Vegas) today announced new, nonstop jet service on 12 routes, including a new destination in the Allegiant network – Palm Beach, Florida.
New routes announced include:
Seasonal Nonstop Service to Los Angeles International Airport (LAX) from:
- Cedar Rapids, Iowa – begins June 6, 2014 with fares as low as $92*
- Great Falls, Montana – begins June 6, 2014 with fares as low as $88*
- Kalispell, Montana – begins June 5, 2014 with fares as low as $89*
- McAllen, Texas – begins June 5, 2014 with fares as low as $99*
Seasonal Nonstop Service to Myrtle Beach International Airport (MYR) from:
- Cincinnati, Ohio – begins May 30, 2014 with fares as low as $59*
- Columbus, Ohio – begins May 29, 2014 with fares as low as $54*
- Lexington, Kentucky – begins May 29, 2014 with fares as low as $54*
- Syracuse, New York – begins May 29, 2014 with fares as low as $64*
Seasonal Nonstop Service to St. Petersburg-Clearwater International Airport (PIE) from:
- Cincinnati, Ohio – begins May 15, 2014 with fares as low as $59*
Year-Round Nonstop Service to Palm Beach International Airport (PBI) from:
- Asheville, North Carolina – begins May 5, 2014 with fares as low as $64*
Year-Round Nonstop Service to Phoenix-Mesa International Airport (AZA) from:
- Colorado Springs, Colorado – begins May 15, 2014 with fares as low as $49*
- Stockton, California – begins May 15, 2014 with fares as low as $58*
Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N420NV (msn 49424) prepares to land in Las Vegas.
Allegiant Air (Las Vegas) yesterday (February 28) commemorated the 15th anniversary of the carrier’s first scheduled service from Fresno, California to Las Vegas, Nevada on February 28, 1999.
Starting with just one plane, Allegiant has grown to a fleet of 68 planes, flying over 7 million passengers last year. Allegiant now serves 99 cities, more than any other domestic low cost carrier.
Over the years, Allegiant has carried over 40 million passengers, and the Company continues to grow, offering more nonstop service in more communities. In 2013, Allegiant announced service in 15 new cities and added 39 new routes to its network, at a time when many airlines are consolidating and cutting service. The company recently announced its 44th consecutive quarter of profitable operation while keeping its average one-way fare under $100.
Allegiant differs in many ways from other U.S. airlines. The Company is focused on low-cost, nonstop leisure travel, providing customers with low base fares while giving passengers the option to pay for the amenities they want, like luggage, seat assignments and priority boarding, without including the cost of things they don’t need in the price of the ticket.
Allegiant operates under the ultra low-fare model and charges extra for additional services.
Copyright Photo: Norbert G. Raith/AirlinersGallery.com. The pictured former SAS Douglas DC-9-21 N127NK (msn 47361) in the original 1998 colors was leased by Allegiant in June 1998 when it received its FAA Part 121 and DOT certification.
The Teamsters Aviation Mechanics Coalition (TAMC) today issued this statement:
The Teamsters Aviation Mechanics Coalition (TAMC) announced today that it will launch an investigation into reports of a disproportionate number of engine failures, air returns and declared emergencies at Allegiant Air. TAMC immediately recognized that a comprehensive investigation into the continuing maintenance failures at Allegiant is imperative after interviewing pilots at the airline.
TAMC is determined to find the root cause of these maintenance failures regardless of where the investigation may lead. The immediate concern is to identify the underlying cause of these incidents and to offer suggestions to mitigate this unacceptable situation before one of these incidents claims the lives of passengers.
TAMC was established by the Teamsters Airline Division in 2007 to advance and protect the interests of all aviation mechanics and related workers throughout the industry. TAMC is committed to the continued improvement of aviation safety and places great emphasis on maintenance safety issues that affect the mechanics and related craft, the industry and the public.
Allegiant Air (Las Vegas) on June 6 will resume two routes from Los Angeles. The ultra low fare carrier will resume twice weekly service to both Billings, Montana and Pasco (Tri-Cities), Washington per Airline Route. Both routes were dropped in August 2012.
Allegiant today also began new nonstop jet service between Burlington, Vermont and Sanford International Airport (near Orlando) in Florida.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. McDonnell Douglas DC-9-83 N422NV (msn 49381) prepares to land at Los Angeles International Airport (LAX).
Allegiant Air‘s (Las Vegas) business plan is to enter a small market and initially fly twice-weekly to a vacation destination. If it fills up the airplanes, it adds additional days of the week. If the new speculative route does not pan out, the airline quickly drops the airport and the route.
This is the case for both Charlottesville, Virginia and Manhattan, Kansas, both university towns. Allegiant began flying to Charlottesville in November to Sanford, Florida (near Orlando). This route did not work and the ultra low-fare airline is dropping the route on February 23, 2014 according the USA Today and pnj.com.
Manhattan received Allegiant service on November 7, 2013 to Mesa, Arizona (near Phoenix). It too will be dropped on February 23.
Read the full report: CLICK HERE
In other news, Allegiant Air today announced a month-long campaign to spotlight local travelers, commemorating the 15th anniversary of the carrier’s first scheduled service. According to the carrier, “The campaign will celebrate Allegiant’s success and commitment to making leisure travel possible with real stories from loyal customers who have changed the way they travel because of the carrier’s unique brand of low-cost, nonstop service.”
Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N424NV (msn 49421) approaches the runway at the Las Vegas base.
Allegiant Air reports its fourth quarter (44th consecutive profitable quarter) and 2013 financial results
Allegiant Travel Company (Allegiant Air) (Las Vegas) meanwhile has reported the following financial results for both the fourth quarter and full year 2013, as well as comparisons to prior year equivalents:
“We are very proud to report our 44th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “This is the second consecutive year that we have grown both full year EBITDA and operating margin. As we continue to add more efficient Airbus aircraft to our operating fleet, we have the opportunity to continue margin improvement going forward. Thank you for the tireless efforts of our Team Members whose contributions were critical to our successful 2013.”
Notable fourth quarter and full year 2013 company highlights
- Added the Airbus A320 and A319 onto the Allegiant operating certificate
- Ended 2013 with three A319 and five A320 aircraft in service. Added two more A320 aircraft in January 2014
- Retired five MD-80 aircraft
- Completed the conversion of 51 MD-80 aircraft to 166 seats. Will add two more MD-80 aircraft configured with 166 seats to the fleet in March 2014. We expect our MD-80 fleet to remain at 53 aircraft for the foreseeable future
- Returned $83 million to shareholders through the repurchase of 913,806 shares in 2013
- Paid a special dividend of $2.25 per share in early January 2014
- Added 44 new routes in 2013. Announced five new routes and two new cities starting service first quarter 2014
- Delivered Allegiant2Go Mobile Boarding Pass functionality in the fourth quarter
- Broadened third-party purchase options via one-way package and hotel-only booking path
- Executed a new agreement with a large Las Vegas gaming company for the pre-purchase of rooms at discounted rates
- Entered into a new three year agreement with Enterprise Holdings Inc. for the sale of rental cars
- Included on the 100 America’s Best Small Companies list by Forbes magazine
Fourth quarter and full year 2013 revenue performance
- Full year ancillary air-related charges per passenger has increased every year for eight consecutive years
- 16th consecutive quarter of year over year increases in total fare, four percent higher than a year ago
- Fourth quarter Florida TRASM grew by two percent despite a 35 percent growth in ASMs
- Same store routes, those operated in both the fourth quarter 2013 and 2012, generated a three percent increase in TRASM
Fourth quarter and full year 2013 cost performance
- Full year 2013 fuel expense per ASM declined six percent primarily due to a two percent decrease in gallons per passenger. This fuel savings more than offset the one percent increase in average fuel cost per gallon. Full year system ASMs per gallon increased seven percent versus 2012
- Full year 2013 CASM ex fuel rose five percent versus last year in part because aircraft utilization declined four percent. CASM ex fuel was also negatively impacted by expenses due to an operational disruption in September, and the FAA shutdown and the subsequent delay in placing A320s into service in December. The A320 delay drove higher expense in aircraft lease rentals as we contracted with other carriers for sub-service to fly scheduled flights, reduced crew productivity and increased expenses to temporarily assign flight crews to bases to support unplanned MD-80 flying in place of planned A320 flying
- Fourth quarter salary and benefits expense increased 17 percent due to a 13 percent increase in full time equivalent employees to support fleet growth and more inflight staff to crew larger gauge MD-80 aircraft, increased bonus accrual which is tied to higher levels of profitability and higher stock compensation expense
- Fourth quarter sales and marketing expense increased 46 percent due to advertising to support the launch of new routes
- Fourth quarter aircraft lease rental expense was $5.5 million due to having two leased aircraft (none a year ago) and $4.2 million of sub-service expense due to the delays in planned A320 flying
- Fourth quarter other expense increased 16 percent due to increases in flight crew training, contractor IT development resources, and losses on consignment and disposal of assets
- Certain fourth quarter non-cash expenses totaled $5.4 million for the quarter and $19.3 million for the year. Please see the non-cash expense table in the Non-GAAP presentation for further detail
- Full year CASM ex fuel is expected to increase between four and seven percent due to a more normalized maintenance and repair expense of between $100 thousand and $110 thousand per aircraft per month, start-up expenses in non-airline subsidiaries (which do not generate airline capacity or ASMs) and continued investment in operations and IT management
- First quarter 2014 CASM ex fuel is expected to increase between 13 and 15 percent due to expenses associated with the delay in training A320 crews resulting from the FAA shutdown and its continued effects and the subsequent delay in placing the A320 on the certificate, lower than planned capacity growth due to the same issue, higher maintenance expense due to substantially more heavy maintenance events scheduled in the quarter, and start-up expenses in two new non airline initiatives which do not generate airline capacity or ASMs. The effects of the A320 delays and non-airline activities are expected to account for 53 percent of the increase in CASM ex fuel for the quarter
Third party products performance
- Full year transportation net revenue (revenue derived from car rentals) increased 11 percent
- Las Vegas represented 82 percent of hotel net revenue in 2013, down from 87 percent in 2012 and 90 percent in 2011
- Full year hotel net revenue excluding the effect of an air discount increased 25 percent versus last year. In the fourth quarter of 2012, the company phased out offering an air discount tied to hotel sales in order to increase overall company profitability
Balance Sheet highlights:
- Returned $42 million to shareholders through a special dividend of $2.25 per share
- Repurchased 913,806 shares of common stock for $83 million in 2013. The company has $40 million in repurchase authority remaining
- Cumulative return of capital in the form of re-purchases of shares and special dividends totals $277 million as of January 2014
- $178 million in capital expenditures during 2013, 83 percent for the purchase of eight Airbus series aircraft and a new headquarters building
- Issued $106 million in debt in 2013, $96 million secured by eight A320 series aircraft and $10 million by the new headquarters building
- Paid down $23 million in debt including $10.5 million previously secured by four 757 aircraft. $9 million in debt remains secured by the remaining two 757 aircraft in our fleet as well as a term loan due in 2017 of $122 million secured by MD-80 aircraft and parts
- 2014 CAPEX is expected to be between $60 and $80 million primarily driven by two A320 purchases occurring at the end of 2014 and IT projects
|Total Allegiant Travel Company stockholders’ equity||$375.7||$400.5||(6.2||)%|
|For the Year
ended December 31,
* – Unrestricted cash includes investments in marketable securities.
At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision.
|Guidance, subject to revision|
|Revenue guidance||January 2014||1Q14|
|Estimated PRASM year-over-year change||6.5 to 8.5%||(2) to 0%|
|Estimated TRASM year-over-year change||2 to 4%||(4) to (2)%|
|Fixed fee and other revenue guidance||1Q14|
|Fixed fee and other revenue (millions)||$1 to $3|
|Departure year-over-year growth||8 to 12%||10 to 14%|
|ASM year-over-year growth||10 to 14%||8 to 12%||9 to 13%|
|Departure year-over-year growth||8 to 12%||10 to 14%|
|ASM year-over-year growth||10 to 14%||8 to 12%||9 to 13%|
|CASM ex fuel – year-over-year change||13 to 15%||4 to 7%|
|CASM – year-over-year change||4 to 6%||1 to 4%|
|Assumed fuel cost per gallon||$3.32||$3.22|
|Capital expenditures (millions)||$60 to $80|
CASM ex fuel – cost per available seat mile excluding fuel expense
CASM – total operating expenses / system ASMs
Fuel assumptions are modeled as of January 20, 2014
|Aircraft fleet plan by end of period|
Aircraft listed in table above include only in service aircraft
* – MD-80s converted to 166 seats from 150 seats
Copyright Photo: James Helbock/AirlinersGallery.com. Allegiant is now operating three Airbus A319s and seven A320s. Airbus A319-112 N310NV (msn 2224) approaches the runway at Los Angeles International Airport.
Allegiant Air‘s (Las Vegas) pilots have issued this statement:
Allegiant Air’s pilots, represented by the Allegiant Air Pilots Executive Council, an employee group of Allegiant Travel Company (Las Vegas) and pilots represented by Teamsters Local Union 1224 in Wilmington, Ohio, announced plans to begin formal dialogues with Allegiant stakeholders and other influential voices in the financial community, including institutional shareholders, equity analysts, corporate lenders and insurers, in order to address operating and safety concerns that exist at the airline.
“Allegiant management has turned a deaf ear to serious operational concerns raised by the pilots,” said Capt. David Bourne, Director of Airline Division at the International Brotherhood of Teamsters. “We believe Allegiant’s financial backers have a right to know what is going on and be given a chance to weigh in on vital changes needed for Allegiant’s long-term success before it’s too late.”
“Allegiant’s low-cost model works if it can actually support the growth of the business,” Bourne said, “However, management’s lack of operational know-how and flat-out resistance to put badly needed investments into infrastructure is taking a significant toll on flight operations, which could ultimately jeopardize flight safety. It’s obvious to us that the major service disruptions over the last several months, ranging from multiple fleet shutdowns, chronic staffing and equipment shortages, significant ramp-up in 3rd party contracting for scheduled flights and sub-servicing and the shutdown of the company’s training department, all flow from the short-sighted decisions being made at the top.”
“It is very unusual for a company’s training department to be shut down,” said Dan Wells, President of Teamsters Local 1224. “Allegiant has yet to even acknowledge the training shutdown, much less show its pilots a plan for corrective action or indicate if those changes will adequately satisfy Federal Aviation Administration concerns. Many Allegiant pilots have been delayed in training for months, which we believe is driving a major increase in outsourcing due to the shortage of company pilots to fly scheduled flights and re-route equipment back to hubs and maintenance centers.”
“Management has ignored repeated requests for clarity on the training program by both the union and Allegiant’s own pilots,” Bourne said. “We’ve filed a Freedom of Information Act submission with the FAA on the matter, but the agency’s only reply was that there is an ongoing investigation at the company. In the meantime, Allegiant pilots continue to bend over backwards to work with the company to address the very significant issues that are interfering with the ability of Allegiant flight crews to do their jobs properly and service customers effectively. We are hopeful that conversations with investors and other Allegiant stakeholders will lead to a breakthrough on some of the key obstacles affecting the future of the airline.”
Copyright Photo: Jay Selman/AirlinersGallery.com. Allegiant Air’s Boeing 757-204 WL N904NV (msn 26967) arrives at the Las Vegas base.
Allegiant Air (Las Vegas) will add new seasonal, nonstop jet service between Portsmouth and Punta Gorda Airport beginning on February 12, 2014. The new flights will operate twice weekly between Portsmouth International Airport at Pease (PSM) and Punta Gorda Airport (PGD).
Copyright Photo: Ton Jochems/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N422NV (msn 49381) lands in Las Vegas.
Allegiant Travel Company (Allegiant Air) (Las Vegas) reported the following financial results for the third quarter 2013, as well as comparisons to prior year equivalents:
|Unaudited||3 months endedSept 30,|
|Total operating revenue (m)||$||228.9||$||216.9||5.5||%|
|Operating income (millions)||$||29.2||$||28.7||1.7||%|
|Net income (millions)||$||17.1||$||16.9||1.0||%|
|Diluted earnings per share||$||0.91||$||0.87||4.6||%|
“We are very proud to report our 43rd consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We are pleased to produce another profitable quarter and be able to return cash to shareholders through our share repurchase program. In addition, I am proud to announce that Andrew Levy has been added to our Board of Directors and will also assume the role of Chief Operating Officer. His proven leadership abilities and extensive operational and financial expertise, as well as a deep understanding of the airline business, will be invaluable in his new role as COO.”
“Finally, we were significantly challenged operationally at the end of September many of our MD-80s were taken out of service due to an evacuation slide issue. Through the tireless efforts of our Team Members, we were able to minimize the disruption to our customers. I am very thankful to all of those individuals who worked extremely hard to put the operation back together in such a short amount of time.”
Notable Company Highlights
- Completed the acquisition of five Airbus A320 aircraft. The company now owns seven A320s
- Repurchased 491,000 shares for $47 million during the third quarter, average purchase price of $95.85 per share
- Announced service from nine existing cities to Punta Gorda (Southwest Florida) to begin in the fourth quarter
- Announced service to 12 new cities with service beginning in the fourth quarter and first quarter
- Announced 29 new routes which will begin operation in the fourth quarter
- Average aircraft in service was flat versus last quarter as we retired three MD-80 aircraft and temporarily grounded two MD-80 aircraft early in the quarter
- Increasing MD-80 operating fleet from 52 at the end of the year to 53 in the first quarter of 2014
Third Quarter 2013 Revenue Performance
- 15th consecutive quarter of year over year increases in total average fare, 4.8 percent higher than a year ago
- Florida TRASM grew by 9.6 percent despite 12.7 percent growth in ASMs
- Same store markets, those which were operated in both the third quarter 2013 and 2012, generated a 5.0 percent increase in TRASM
- Grew scheduled load factor to 90.8 percent despite a 4.2 percent increase in seats per departure
- The September slide interruption resulted in approximately $1 million in refunds given to customers
|Average fare – scheduled service||$86.94||$82.30||5.6||%|
|Average fare – ancillary air-related charges||$38.99||$37.05||5.2||%|
|Average fare – ancillary third party products||$5.06||$5.59||(9.5||)%|
|Average fare – total||$130.99||$124.94||4.8||%|
|Scheduled service passenger revenue per ASM (PRASM) (cents)||8.14||7.89||3.2||%|
|Total scheduled service revenue per ASM (TRASM) (cents)||12.26||11.98||2.3||%|
|Average passengers per departure||150||143||4.9||%|
|Average scheduled service stage length (miles)||932||910||2.4||%|
ASMs = available seat miles
PRASM = scheduled passenger revenue per scheduled available seat mile
TRASM = (scheduled passenger revenue + ancillary air revenue + ancillary third party revenue) per scheduled available seat mile
Third Quarter 2013 Cost Performance
- Fuel expense per ASM declined 3.9 percent primarily due to a 5.8 percent increase in ASMs per gallon versus last year, which more than offset a 1.9 percent increase in average cost per gallon
- Operating expense excluding fuel was negatively impacted by lower aircraft utilization and approximately $2 million in expense attributable to the evacuation slide interruption. The expense associated with the slide event is isolated to September and resulted in higher aircraft lease rentals expense as we contracted with other carriers for sub-service of aircraft to move some of our customers, higher station operations expense due to customer interrupted trip costs, and increased salary and benefits expense due to additional overtime
- Salary and benefits expense per passenger increased 15 percent versus last year primarily due to an increase in the number of full time equivalents to support our growth, higher stock-based compensation expense and the continuation of the higher pay band for pilots which began in November 2012. The current pay band will continue through April 2014 when it will be subject to adjustment based on a trailing 12 month profitability test. Based on our forecasted profitability, we currently expect the pilot pay band to remain unchanged
- Depreciation and amortization expense per passenger increased 8 percent primarily due to a change in estimated MD-80 engine residual values and useful life, and operating a larger contingent of 166 seat MD-80 aircraft
- Other expense per passenger increased 31 percent due to a higher write-down of engine values in our consignment program compared to the prior year, non capitalizable information technology development costs, crew training for our growing Airbus fleet and costs to support a seasonal operating base in Los Angeles
|Operating expense per passenger||$114.54||$108.92||5.2||%|
|Operating expense per passenger, excluding fuel||$63.37||$56.85||11.5||%|
|Operating expense per ASM (CASM) (cents)||10.58||10.29||2.8||%|
|Operating expense, excluding fuel per ASM (CASM ex fuel) (cents)||5.85||5.37||8.9||%|
|Average block hours per aircraft per day||5.1||5.2||(1.9||)%|
*Total system includes scheduled service, fixed-fee contract and non-revenue flying.
Fourth Quarter 2013 Cost Trends
- Salary and benefits expense is expected to increase due to additional staff required to support our growth
- Maintenance and repair expense is expected to be slightly higher than fourth quarter 2012. For the full year, maintenance expense per aircraft per month is expected to be $100 thousand to $105 thousand as previously guided
- Aircraft utilization is expected to decline 1.5%, which will pressure ex fuel unit costs when compared to fourth quarter 2012
- Depreciation and amortization expense is expected to increase as seven A320 aircraft are scheduled to enter service in the fourth quarter. For the full year, depreciation per aircraft per month is expected to be between $92 thousand and $95 thousand, as previously guided
Third Party Products Performance
- Rental car days increased 6.5 percent primarily due to a 18 percent increase in Florida passengers
- Hotel net revenue excluding the effect of an air discount was higher by 39 percent versus last year. The company has phased out offering an air discount which has historically subsidized hotel sales
|Supplemental Ancillary Revenue Information
|Gross ancillary revenue – third party products||$28.7||$28.3||1.4||%|
|Cost of goods sold||($19.6||)||($18.5||)||5.9||%|
|Ancillary revenue – third party products||$8.6||$9.0||(4.4||)%|
|As percent of gross||30.1||%||31.9||%||(1.8)pp|
|As percent of income before taxes||31.3||%||33.6||%||(2.3)pp|
|Ancillary revenue – third party products/scheduled passenger||$5.06||$5.59||(9.5||)%|
|Hotel room nights (thousands)||144.4||163.4||(11.6||)%|
|Rental car days (thousands)||195.3||183.3||6.5||%|
*Includes payment expenses and travel agency commissions.
Balance Sheet Highlights
- Repurchased 491,000 shares for $47 million and have over $43 million in repurchase authority remaining. Year to date, the company has repurchased 880,991 shares at an average price of $85.64 per share
- Issued $48.0 million in debt secured by four Airbus aircraft
- Pre-paid $10.5 million in debt secured by four 757 aircraft
- Spent $84.5 million in capital expenditures in the third quarter, the majority of which was driven by the purchase of five Airbus A320 aircraft
- Closed a $10 million debt financing in October, secured by our new headquarters building acquired earlier this year
|Total Allegiant Travel Company stockholders’ equity||$402.4||$400.5||0.5||%|
|Nine months ended September 30,|
*Unrestricted cash includes investments in marketable securities.
At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision.
|Guidance, subject to revision|
|Revenue guidance||October 2013||4Q13|
|Estimated PRASM year-over-year change||5 to 7%||3 to 5%|
|Estimated TRASM year-over-year change||1 to 3%||0.5 to 2.5%|
|Fixed fee and other revenue guidance||4Q13|
|Fixed fee and other revenue (millions)||$3 to $5|
|Departure year-over-year growth||(4) to 0%||8 to 12%|
|ASM year-over-year growth||4 to 8%||10 to 14%||8 to 10%|
|Departure year-over-year growth||2 to 6%||8 to 12%|
|ASM year-over-year growth||8 to 12%||10 to 14%||13 to 15%|
|CASM ex fuel – year-over-year change||4.5 to 6.5%||4 to 5%|
|Capital expenditures (millions)||$170 to $180|
CASM ex fuel – cost per available seat mile excluding fuel expense
|Aircraft fleet plan by end of period|
|MD-80 (non 166*)||1||-|
*166 refers to MD-80s that have been converted to 166 seat aircraft, non 166 refers to those aircraft that will not be converted
Aircraft listed in table above include only in service aircraft
In other news, the company announced new, nonstop jet service from Cincinnati-Northern Kentucky International Airport to Orlando-Sanford International Airport starting on February 12, 2014 and Punta Gorda Airport beginning on February 14, 2014.
This announcement marks the 100th U.S. city served by Allegiant’s low-cost, nonstop service to popular vacation destinations, more than any other low-cost carrier in the U.S.
Copyright Photo: Tony Storck/AirlinersGallery.com. Allegiant Air’s McDonnell Douglas DC-9-82 (MD-82) N408NV (msn 53246) in the Blue Man Group special livery lands at the Las Vegas hub and base. Allegiant moved to Concourse A at LAS on October 15.
Allegiant Air (Las Vegas) will move its Las Vegas operation today from Concourse D to Concourse A. This area was previously vacated by US Airways.
Read the full story from Las Vegas Review-Journal: CLICK HERE
Copyright Photo: Tony Storck/AirlinersGallery.com. Allegiant Air’s Boeing 757-204 N902NV (msn 26964) climbs over the Strip at Las Vegas.
FAA Airport Map for LAS:
Allegiant Air (Las Vegas) yesterday (September 20) grounded upwards of 30 McDonnell Douglas MD-80s (DC-9-80s). The cancellation of flights was due to an inspection of the emergency chutes of its 52 MD-80s.
Allegiant issued this statement:
Allegiant announces it has discovered a compliance issue which will require immediate re-inspection of many slides in its MD-80 fleet. The Company has already begun the re-inspections and expects to complete the process by the end of September. MD-80 aircraft will be placed back in service as soon as possible after the slides pass re-inspection. In the meantime, Allegiant will take as many as 30 MD-80s out of service and delay, reschedule or cancel a number of flights over the next several days.
“We apologize for the disruption to our passengers and ask that they please remain patient as we work to correct the issue, reschedule affected flights and accommodate any passengers impacted,” said Andrew Levy, Allegiant Travel Company President. “Allegiant is committed, above all else, to the safety of our passengers and crew, and we are dedicated to working around-the-clock to ensure that all of our fleet meets the highest standards.”
At this time, it is unknown how long the disruption in flight schedule will last.
The company has secured sub-service on seven aircraft from other carriers to assist in operating its Sunday and Monday flight schedule and expects to have 22 MD-80 aircraft in service by Saturday. Allegiant expects delays and reschedules to continue, but is working around-the-clock to re-accommodate and update passengers.
During a thorough incident review earlier this week, Allegiant maintenance became aware of a discrepancy in its slide maintenance schedule. In 2007, the original manufacturer recommendation for slide maintenance schedule changed from once every three years to once a year for slides older than 15 years. Allegiant discovered that many of the slides had not been inspected within the last year and did not comply with this recommendation. This prompted Allegiant to proactively remove aircraft from service until all slides could be brought into compliance. To inspect and overhaul the slides, the slides must be removed and sent to a regulated inspection and maintenance facility.
Allegiant teams are working to accommodate all affected passengers and will offer the following compensation:
- Flights delayed less than four hours: $100 voucher for future travel
- Flights delayed 4-6 hours: $150 off voucher for future travel
- Flights delayed 6 or more hours: $200 voucher for future travel
- Reschedule flights: Full refund and $200 voucher for future travel
For passengers delayed overnight, hotel accommodations and meals will be provided. For travel and compensation questions, please call Allegiant Customer Care at 702-505-8888
Read the full report from Reuters: CLICK HERE
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Officially designed as a McDonnell Douglas DC-9-83 (MD-83), N417NV (msn 53347) prepares to depart from Long Beach.
Allegiant Air (Las Vegas) has started this TV advertisement on a national basis. The ad is actually an odd way of explaining their “charge for extras” strategy.
Allegiant AIr (Las Vegas) has announced new, nonstop jet service between Concord, North Carolina (near Charlotte) and Sanford, Florida via Orlando-Sanford International Airport, beginning on December 20, 2013. Concord will be the 99th U.S. city served by Allegiant.
The new flights will operate twice weekly between Concord Regional Airport (JQF) and Orlando-Sanford International Airport (SFB) year-round.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N420NV (msn 49424) prepares to land at Los Angeles International Airport.
Allegiant Air (Las Vegas) today announced new, nonstop jet service on 18 routes, including 10 cities new to the Allegiant network. Today’s announcement will mark the 99th U.S. city served by Allegiant’s low-cost, nonstop service to popular vacation destinations, more than any other low-cost carrier in the U.S.
Allegiant will now offer service to travelers in the New York City area, providing a low-cost travel alternative to the beaches of Southwest Florida via Long Island MacArthur Airport and Stewart International Airport.
New routes just announced include:
Nonstop Service to Phoenix-Mesa Gateway Airport (AZA) in Mesa, AZ from:
- Fort Wayne, Indiana – begins Oct. 30, 2013 with fares as low as $99* roundtrip
- Manhattan, Kansas – begins Nov. 7, 2013 with fares as low as $99* roundtrip
Nonstop Service to Orlando-Sanford International Airport (SFB) in Sanford, FL from:
- Bismarck, North Dakota – begins Nov. 23, 2013 with fares as low as $99* roundtrip
- Charlottesville, Virginia – begins Nov. 21, 2013 with fares as low as $99* roundtrip
- Clarksburg, West Virginia – begins Nov. 14, 2013 with fares as low as $99* roundtrip
- Concord, North Carolina – begins Dec. 20, 2013 with fares as low as $99* roundtrip
- Oklahoma City, Oklahoma – begins Nov. 14, 2013 with fares as low as $99* roundtrip
- Portsmouth, New Hampshire – begins Oct. 25, 2013 with fares as low as $99* roundtrip
- Springfield, Illinois – begins Nov. 22, 2013 with fares as low as $99* roundtrip
- St. Cloud, Minnesota – begins Dec. 18, 2013 with fares as low as $99* roundtrip
- Tulsa, Oklahoma – begins Oct. 25, 2013 with fares as low as $99* roundtrip
Nonstop Service to St. Pete-Clearwater International Airport (PIE), FL from:
- Columbus, Ohio – begins Nov. 23, 2013 with fares as low as $99* roundtrip
- Elmira, New York – begins Nov. 1, 2013 with fares as low as $99* roundtrip
- Fargo, North Dakota – begins Nov. 23, 2013 with fares as low as $99* roundtrip
- Sioux Falls, South Dakota – begins Nov. 1, 2013 with fares as low as $99* roundtrip
- Stewart, New York – begins Oct. 31, 2013 with fares as low as $99* roundtrip
- Syracuse, New York – begins Nov. 7, 2013 with fares as low as $99* roundtrip
Nonstop Service to Punta Gorda Airport (PGD) in Punta Gorda, FL from:
- Islip, New York – begins Dec. 20, 2013 with fares as low as $99* roundtrip
Copyright Photo: Brian McDonough/AirlinersGallery.com. McDonnell Douglas DC-9-82 (MD-82) N406NV (msn 49900) completes its final approach into Baltimore/Washington.
Allegiant Air (Las Vegas) operated its last flight from Gary, Indiana (near Chicago) yesterday (August 10). The last flight was operated from Gary to Sanford, Florida (near Orlando). Gary Chicago International Airport is now without any airline service once again. The airport had tried to market itself as the Chicago area’s third airport.
Read the full report from Chicago Sun-Times: CLICK HERE
Allegiant Air (Las Vegas) has announced today new, nonstop jet service to Southwest Florida via Punta Gorda Airport (PGD) from eight destinations, beginning on October 30.
Allentown/Bethlehem/Easton, PA – begins October 31, 2013 with fares as low as $99.99 each way
Asheville, NC – begins November 2, 2013 with fares as low as $69.99 each way
Bangor, Maine – begins October 30, 2013 with fares as low as $124.99 each way
Cedar Rapids, Iowa – begins December 18, 2013 with fares as low as $99.99 each way
Des Moines, Iowa – begins December 19, 2013 with fares as low as $119.99 each way
Moline/Quad Cities, Illinois – begins November 1, 2013 with fares as low as $99.99 each way
Springfield/Branson, Moissouri – begins October 31, 2013 with fares as low as $89.99 each way
Youngstown, Ohio – begins October 30, 2013 with fares as low as $89.99 each way
The expansion of routes into Punta Gorda will result in two additional McDonnell Douglas DC-9-80 (MD-80) series aircraft based at Punta Gorda Airport.
Additionally the low-fare airline announced new, nonstop, seasonal jet service from Montrose to Los Angeles, California and reintroduction of service to Mesa, Arizona (near Phoenix) beginning December 21, 2013.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. McDonnell Douglas DC-9-82 (MD-82) N423NV (msn 53008) departs from Los Angeles International Airport.
Allegiant Air flight 863 makes an emergency landing at Albany, Georgia, passengers bussed to St. Petersburg, Florida
Allegiant Air‘s (Las Vegas) flight 863 from Cedar Rapids, Iowa to St. Petersburg/Clearwater, Florida last night (July 28), was forced to make an emergency landing at the nearest airport and landed at Albany, Georgia after the flight crew was alerted by a sensor of a possible fire in the baggage compartment. The flight landed safely at ABY and there was no evidence of a fire. All passengers safely exited the aircraft via the emergency chutes. Airport operations at the airport had already left for the day. Fire and Police units assisted the passengers exiting the aircraft.
This morning the passengers continued their journey to Florida, this time on four busses, arriving this morning at PIE.
Read the full report from News Channel 5 (with new video): CLICK HERE
Allegiant Travel Company (Allegiant Air) (Las Vegas) reported a net income of $25.8 million in the second quarter, up 2.3 percent from the same quarter a year ago. This represents the 42nd consecutive profitable quarter.
Read the full report: CLICK HERE
Copyright Photo: Bruce Drum/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N879GA (msn 53486) approaches the Las Vegas base for landing dressed in the old 2003 livery.
Allegiant Air (Las Vegas) has announced new nonstop jet service between Austin and Las Vegas beginning on October 31.
The new flights will operate four times each week between Austin-Bergstrom International Airport (AUS) and McCarran International Airport (LAS).
In addition, the company will also start twice-weekly service between Reno and Oakland on August 30.
Copyright Photo: Bruce Drum/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N876GA (msn 53469) prepares to land at the Las Vegas base.
Allegiant Air (Las Vegas) has announced new, twice-weekly nonstop jet service between Los Angeles and Honolulu beginning on October 30, 2013.
In March 2010, the company announced it signed a forward purchase agreement to acquire six Boeing 757-200 aircraft that enabled Allegiant to expand its leisure travel strategy into Hawaii with flights beginning in summer 2012.
Allegiant currently operates a fleet of 57 McDonnell Douglas DC-9-80 (MD-80) aircraft, six Boeing 757-200 aircraft, and one Airbus A319 aircraft. The Company has agreements to acquire eight additional Airbus A319 aircraft and nine Airbus A320 aircraft, which will be introduced throughout 2013 and the beginning of 2014.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 757-204 N906NV (msn 27236) lands at the Las Vegas home base.
Allegiant Air (Las Vegas) has announced new, twice-weekly nonstop jet service between Provo Municipal Airport (PVU) and Los Angeles International Airport (LAX) beginning on September 26, 2013.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. McDonnell Douglas DC-9-82 (MD-82) N423NV (msn 53008) departs from Los Angeles International Airport.
Allegiant Air (Las Vegas) has filed an application with the U.S. Department of Transportation (DOT) to operate twice-weekly flights from Las Vegas to Hermosillo and San Jose del Cabo in Mexico. Flights, if approved, would start around June 1, 2014 according to this report by Bloomberg Businessweek.
Read the full report: CLICK HERE
USA Today has joined the growing list of media publications now praising the small city strategy of Allegiant Air which they have been flying for years.
Read their take on the carrier: CLICK HERE
Copyright Photo: Bruce Drum/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N866GA (msn 49910) prepares to land at the Las Vegas home.
Allegiant Air (Las Vegas) yesterday (June 18) took delivery of its first Airbus A320 (N219NV).
In other news, Allegiant introduce twice weekly nonstop service on June 7 between Provo International Airport (PVU) and Oakland International Airport (OAK).
Copyright Photo: Greenwing/AirlinersGallery.com. Sister-ship and former Iberia A320-214 EC-HUL (msn 1347) is awaiting delivery at Dublin as N217NV.
Allegiant Air (Las Vegas) is under the financial analysis of the Wall Street Journal in a special detailed article by Jack Nicas that explores why this fast-growing airline is the most profitable airline in the United States. This low-fare airline, which breaks most of the industry “rules”, has been off the radar screens of most of the mainstream media for a long time, except in the smaller cities where a new Allegiant route to Las Vegas, Arizona, California, Hawaii or Florida grabs local headlines. Allegiant has the “lowest costs, fullest planes and highest margins” in the United States according to this article. The secret formula, as we have detailed, is flying mostly older planes that others no longer want from cities that are too small for the others to care about to exciting vacation destinations on a limited number of peak traffic days. Allegiant Air also makes a lot of ancillary revenue from its travel packages, taking a page out of the Ryanair playbook. Allegiant aims to be the total travel package airline for the traveller. The business plan is working well.
Now Allegiant is planning to expand in Mexico. This article details the growth and its expansion plans.
Read the full article: CLICK HERE
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Most airlines cannot get rid of these older, fuel-guzzling McDonnell Douglas MD-80s fast enough. Not Allegiant, they love the type and only fly their aircraft when they can make money. During mid-week, when most passengers are already at their holiday destinations, Allegiant parks most of its inefficient, fuel-guzzling fleet. Allegiant only flies when it can make money. Departing on a weekend, former SAS McDonnell Douglas DC-9-83 (MD-83) departs from Los Angeles International Airport.
Video: Allegiant Air TV commercial:
Allegiant Travel Company (Allegiant Air) (Las Vegas) reported the following financial results for the first quarter 2013:
|Total operating revenue (millions)||$273.0||$237.9||14.8%|
|Operating income (millions)||$52.4||$36.3||44.2%|
|Net income (millions)||$31.9||$21.7||47.1%|
|Diluted earnings per share||$1.65||$1.12||47.3%|
“We are very proud to report our 41st consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “The month of March is typically our busiest month of the year, and this year was no different. Thanks to the tireless efforts of our Team Members, we have had another profitable quarter.”
Notable company quarterly highlights
- Began flying our first A319 on March 1, 2013, the second A319 on April 4, 2013
- Repurchased over 284,000 shares for $22.2 million dollars, average purchase price of $78.15
- Received board approval to increase share repurchase authority to $100 million
- Completed the 166 seat MD-80 conversion project in February
- Added two new small cities Provo, UT and Reno, NV
- Added eight routes in the quarter
- Announced five routes which will start in the second quarter, including one new city, Little Rock, AR
- Operated 198 routes in the first quarter of 2013. Expect to operate 203 routes in the second quarter of 2013
First quarter 2013 revenue performance
- 13th consecutive quarter of year over year increases in total average fare
- First quarter 2013 average fare, average ancillary air per passenger, and total fare were the highest in the company’s history
- First quarter TRASM increased by 1.2 percent even though we increased average scheduled service stage length by 4.9 percent and scheduled service ASMs grew by 17 percent
- Load factor returned to a normalized rate closer to 90%
- Same store markets, those which were operated in the first quarter 2012 and 2013, had a 4.3 percent TRASM increase versus the system average of 1.2 percent
- Fixed fee revenue’s decline is attributable to no longer operating two aircraft in track charter programs as previously disclosed
|Average fare – scheduled service||$97.54||$94.95||2.7%|
|Average fare – ancillary air-related charges||$41.64||$32.39||28.6%|
|Average fare – ancillary third party products||$5.81||$5.36||8.4%|
|Average fare – total||$144.99||$132.70||9.3%|
|Scheduled service passenger revenue per ASM (PRASM) (cents)||8.60||9.04||(4.9)%|
|Total scheduled service revenue* per ASM (TRASM) (cents)||12.79||12.64||1.2%|
|Average passengers per departure||148||138||7.2%|
|Average scheduled service stage length (miles)||978||932||4.9%|
* Total scheduled service revenue includes scheduled service, ancillary air-related charges, and ancillary third party products revenue.
ASMs = available seat miles
PRASM = scheduled passenger revenue per scheduled available seat mile
First quarter 2013 cost performance
- Operating CASM, excluding fuel increased only 0.2 percent to 5.18 cents despite an almost eight percent decrease in aircraft utilization for the same time period due to a higher concentration of flying during peak periods
- Operating expense per ASM decreased by three percent even though our average fuel expense per gallon increased by three percent. System ASMs per gallon of fuel improved to 67.3; a 9.6 percent increase versus the first quarter 2012
- Maintenance and repairs expense per passenger decreased by 19.2 percent due to a more normalized rate of engine overhaul expense compared to unusually high levels in the first quarter of 2012
- Salary and benefits expense per passenger increased by 18.4 percent due mainly to increases in pilot compensation. As we reached a trailing twelve month operating margin of 14 percent in November of 2012, our pilots moved into a higher pilot pay rate band per our compensation agreement with our pilot work group. Additionally, higher flight attendant headcount resulting from the increased gauge of our MD-80 aircraft and operating six 757 aircraft as opposed to one during the first quarter 2012
- Depreciation and amortization per passenger increased 35 percent primarily due to accelerated depreciation from the announced retirement of six MD-80s from first quarter 2013 through third quarter 2013, along with higher depreciation stemming from 51 converted 166 seat MD-80s at the end of the quarter versus 17 a year ago
- Other expense per passenger increased 35 percent primarily attributable to a higher write-down of engine values in our consignment program
|Operating expense per passenger||$117.31||$112.03||4.7%|
|Operating expense per passenger, excluding fuel||$59.62||$55.10||8.2%|
|Operating expense per ASM (CASM) (cents)||10.20||10.52||(3.0)%|
|Operating expense, excluding fuel per ASM (CASM ex fuel) (cents)||5.18||5.17||0.2%|
|Average block hours per aircraft per day||5.9||6.4||(7.8)%|
* Total system includes scheduled service, fixed-fee contract and non-revenue flying.
Second quarter 2013 cost trends
- Salary and benefit expense is still subject to the same pressures as in the first quarter including the higher pilot pay band in effect
- We expect the bulk of the engine and heavy airframe maintenance for the year will be incurred in the second and third quarters. For the full year, we are still anticipating maintenance per aircraft per month to be between $100 thousand and $110 thousand which has been our normalized historical run rate
- Second quarter depreciation expense will still feel the impact of the accelerated depreciation reflected in the first quarter and to a lesser extent the higher depreciation from the converted 166 seat MD-80s as we had converted 27 aircraft by the end of June 2012. Four of the MD-80s driving the bulk of the accelerated depreciation are scheduled to be retired in the third quarter of 2013. In addition, we are expecting higher depreciation in the fourth quarter as we are currently expecting to place seven A320s into service by the fourth quarter of 2013.
Copyright Photo: Keith Burton. Allegiant introduced the first Airbus A319 into operations on March 1. The second was introduced on April 4. The former easyJet (Switzerland) A319-111 HB-JZN became N302NV (msn 2387) when it was delivered on February 11, 2013. The airliner is leased from GECAS.
Allegiant Air (Las Vegas) has announced new, twice-weekly nonstop jet service between Bellingham International Airport (BLI) and Reno-Tahoe International Airport (RNO) beginning on June 6, 2013.
In other news, the company has announced it has now served over four million total travelers at St. Pete-Clearwater International Airport (PIE) since the first flight took off on November 16, 2006 en route to Allentown, PA. Since that time, the company has grown its presence at the airport, now serving 25 cities with nonstop flights into St. Pete-Clearwater International, as well as basing six aircraft at the airport and employing pilots, flight attendants and mechanics.
Copyright Photo: Ton Jochems. McDonnell Douglas DC-9-83 (MD-83) N873GA (msn 49658) touches down at Las Vegas.
Allegiant Air (Las Vegas) plans to temporarily suspend service to Hawaii from seven of the nine mainland cities after the summer season.
Allegiant will suspend flights beginning on August 14 from Boise, Idaho; Eugene, Oregon; Phoenix; Spokane, Washington; and Fresno, Stockton and Santa Maria, all in California according to this report by the Star Advertiser.
The company has recently been struggling with some well-publicized Hawaii cancellations due to mechanical issues affecting its Boeing 757-200 fleet.
Read the full report: CLICK HERE
Copyright Photo: Ton Jochems. Boeing 757-204 N901NV (msn 26963) touches down at the Las Vegas base after arriving from Hawaii.
Allegiant Air (Las Vegas) has announced new, twice-weekly nonstop jet service between Bill and Hillary Clinton National Airport in Little Rock, Arkansas (LIT) and Orlando Sanford International Airport (SFB) beginning on June 6, 2013.
Copyright Photo: Ton Jochems. McDonnell Douglas DC-9-83 (MD-83) N422NV (msn 49381) completes its final approach into Los Angeles International Airport.
Allegiant Air (Las Vegas) has announced new nonstop jet service between Piedmont Triad International Airport (GSO) and Fort Lauderdale-Hollywood International Airport (FLL) beginning on June 6, 2013.
The new flights will operate twice weekly between Piedmont Triad International Airport (GSO) and Fort Lauderdale-Hollywood International Airport (FLL).
Copyright Photo: Brian McDonough. McDonnell Douglas DC-9-83 (MD-83) N876GA (msn 53469) arrives at Fort Lauderdale-Hollywood International Airport.
Allegiant Air (Las Vegas) has announced new nonstop jet service between Provo International Airport (PVU) and Oakland International Airport (OAK) beginning on June 7, 2013. The new flights will operate twice weekly between Provo International Airport (PVU) and Oakland International Airport (OAK).
In addition, the company also announced new nonstop jet service between Asheville Regional Airport (AVL) and St. Pete-Clearwater International Airport (PIE) beginning on June 6, 2013. The new flights will operate two times a week between Asheville Regional Airport (AVL) and St. Pete-Clearwater International Airport (PIE).
Copyright Photo: Ton Jochems. McDonnell Douglas DC-9-83 (MD-83) N420NV (msn 49424) arrives at the Las Vegas hub.
Editor’s “To The Point” Observation: Allegiant’s unique “small cities to holiday markets” business plan initially means adding two roundtrips per week on a new thin route to test the market. Often this new route becomes the biggest flight at this small airport. If the new route does well, Allegiant adds more frequencies until it eventually ramps up to daily service. If not, the route is dropped. This strategy to serve underserved small cities to vacation markets have worked well for the growing carrier.