Allegiant Travel Company (Allegiant Air) today reported the following financial results for the second quarter 2021, as well as comparisons to the prior years:

“The second quarter marked the return of leisure demand to pre-pandemic levels,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “Earnings per share came in at $5.49 on a year over two-year revenue decline of just 3.9 percent, with total revenue in June exceeding 2019 levels. We made significant progress towards achieving pre-pandemic unit revenues with TRASM of 10.36 cents (on a load factor of 70.8 percent), up 50 percent from the first quarter. The revenue team did an outstanding job optimizing loads and unit revenues during the quarter. This strong revenue performance, coupled with continued cost discipline as evidenced by our adjusted CASM, excluding fuel ⁽³⁾, of 5.86 cents, led to our adjusted operating margin⁽¹⁾ of 20 percent for the quarter.

“These results suggest we are close if not back to ‘normal’, where we were in the early days of 2020.  We were the first domestic carrier to grow capacity from 2019 levels. Given the reduced operations of the past year, this ramp up came with challenges – delays in infrastructure preparedness at some of our airports, labor constraints, and severe weather. Our operations team has done a great job reacting and adapting to these headwinds. During the third quarter we will continue our growth – capacity will increase nearly 20 percent, year over two-year.

“Last year at this time I stressed the importance of strengthening our liquidity to both weather the storm and position us favorably for growth post-pandemic. The team has done just that. We currently have $1.2 billion of cash on hand, up 79 percent from a year ago. Our total net debt continues to improve at under $400 million, a 52 percent reduction from a year ago. This strong liquidity leaves us well positioned for future growth. The fleet team has executed agreements to acquire 21 additional aircraft since the beginning of the year. These airplanes will all be placed into service by the end of 2022, thus supporting the remainder of this year as well as most of next year’s growth plan.

“The next year will be an exciting one for the company. We are preparing the launch of our new loyalty program in the coming months, Allways Rewards. This program will enable us to further enhance the customer experience. We also recently announced a new partnership with Live Nation venues, Ticketmaster and music festivals – kicking off a multi-year, strategic relationship with the world’s premier live entertainment company. This partnership will ultimately unlock another layer of leisure offerings, further enhancing a one-stop shop for our customer. Finally, we will continue to grow and expand our network, connecting more customers to world-class vacation destinations.

“I cannot thank our 4,000 team members enough for their continued efforts in supporting growth while prioritizing customer safety. Ramping up the operation the past few months has been a challenge, but our team members continue to work hard to support the operation. I could not be more proud of their efforts.”

Second Quarter 2021 Results

• GAAP earnings per share of $5.49
  • Adjusted earnings per share^{(1) (2) (3)} of $3.46
• Consolidated EBITDA^{(2) (3)} of $183.3 million yielding an EBITDA margin of 38.8 percent
  • Adjusted EBITDA^{(1) (2) (3)} of $138.3 million yielding an adjusted EBITDA margin of 29.3 percent
• Total June revenue exceeded June of 2019
• Total operating revenue was $472.4 million, up 69.3 percent from the first quarter and down 3.9 percent when compared to the second quarter of 2019
  • Sustained yield strength throughout the quarter with yield up 7.8 percent year over two-year on scheduled service capacity increases of 4.5 percent
• Total average fare of $126.82, up 10.8 percent year over two-year
  • Total ancillary average fare $64.25, up 14.6 percent from 2019 driven primarily by bundled air ancillary offerings, rental car rate strength, and increased cobrand activity
• TRASM of 10.36 cents, down 5.6 percent year over two-year, and up 50.3 percent from the first quarter 2021
• Load factor of 70.8%, up nearly 16 percentage points from the first quarter
• Record-breaking quarter for co-brand activity with June new cardholder acquisitions becoming the highest month in the program’s history and the highest month for cardholder spend, beating the prior monthly spend record by more than 40 percent
  • May marked the third highest acquisition of new cardholders in program history
• Adjusted operating expense^{(1) (2) (3)} of $378.6 million, down 1.3 percent from second quarter 2019 on total system capacity increase of 3.3 percent
  • Adjusted Operating CASM, excluding fuel ⁽³⁾ of 5.86 cents, flat when compared to the second quarter of 2019
• Adjusted operating margin⁽¹⁾ of 19.9 percent
• Expanded the network by adding 29 new routes with four new cities and complementary service in Phoenix with the addition of Phoenix Sky Harbor International Airport, bringing total routes served to 596 and 134 cities
• Ranked number two among US airlines within the 2021 Airline Quality Ranking

(1) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs, and profit sharing bonus accruals since the operating margin threshold to accrue these bonuses would not have been met for the six months ended June 30, 2021 without the benefits of the PSPs
(2) Denotes a non-GAAP financial measure
(3) Refer to the Non-GAAP Presentation section within this document for further information

Balance Sheet, Cash and Liquidity

• Total cash and investments at June 30, 2021 were $1.2 billion, up from $728 million at March 31, 2021
  • Cash from operations of $237 million, including the benefit from the payroll support program and federal income tax refund of $12 million related to prior period tax net operating losses
    • Adjusted cash from operations of $176 million, which excludes the $49.2 million net benefit from the PSPs, and $12 million federal tax refund
  • Debt principal payments of $48 million during the quarter
    • Includes prepayment of debt secured by five aircraft
  • $65 million used for cash capital expenditures
  • Raised $335 million from issuance of 1.6 million shares at a price of $219 per share during the second quarter
• Second quarter interest expense of $17 million, down 20 percent year over two-year
• Expect to receive $136 million in federal tax refunds during the second half of the year related to 2020 net operating losses
• Air traffic liability at June 30, 2021 was $437 million
  • Balance related to future scheduled flights is $305 million
  • Balance related to travel vouchers issued for future use is $132 million, a 26 percent reduction from March 31, 2021

Capital Expenditures

• Second quarter capital expenditures related to aircraft, engines and induction costs were $46 million and $19 million in other airline capital expenditures
• Second quarter capital expenditures related to deferred heavy maintenance were $23 million
• Executed agreements to acquire 21 incremental aircraft year-to-date

Aircraft Fleet Plan by End of Period