Allegiant Travel Company (Allegiant Air) (Las Vegas) reported the following financial results for the first quarter 2013:
| Unaudited | 1Q13 | 1Q12 | Change |
| Total operating revenue (millions) | $273.0 | $237.9 | 14.8% |
| Operating income (millions) | $52.4 | $36.3 | 44.2% |
| Operating margin | 19.2% | 15.3% | 3.9pp |
| EBITDA (millions) | $69.4 | $48.3 | 43.6% |
| EBITDA margin | 25.4% | 20.3% | 5.1pp |
| 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
| 1Q13 | 1Q12 | Change | |
| Scheduled Service: | |||
| 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% |
| Load factor | 89.8% | 91.1% | (1.3)pp |
| Passengers (millions) | 1.8 | 1.7 | 8.4% |
| 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
| 1Q13 | 1Q12 | Change | |
| Total System*: | |||
| 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: 