Allegiant Air reports a softening in demand for August

"Official Domestic Airline of the Vegas Golden Knights"

Allegiant Travel Company today reported preliminary passenger traffic results for August 2021. 

“As we have transitioned from our peak summer flying season into the off-peak fall season we have seen a softening in demand,” stated Drew Wells, senior vice president, revenue. “Consistent with industry trends, the increase in COVID-19 cases coupled with return to school and work for many has contributed to an increase in cancellations and a deceleration of demand. The off-peak periods continue to underperform, while peak periods remain strong, a trend that has persisted throughout the pandemic. By way of example, Labor Day weekend performed well with load factors of roughly 80 percent on peak days, consistent with levels observed in 2019.”

“We expect third quarter capacity to be up roughly 13.5 percent as compared with 2019, a 4.5 percentage point reduction from initial expectations,” stated Gregory Anderson, executive vice president, chief financial officer. “Although we did observe demand weakness, these reductions were driven primarily by operational challenges observed throughout the quarter. Given these capacity reductions, we have updated our guidance, which is included in the table below. We expect an increase in total operating revenue from 2019 of between 3.0 and 5.0 percent, which should yield an adjusted1 EBITDA margin between 16 and 18 percent for the third quarter. We will continue to monitor trends and tweak fourth quarter capacity accordingly but given peak-period performance, we remain encouraged about the upcoming holiday travel season.”

Previous Current
System ASMs – year over two-year change2 Up 16.0 to 20.0% Up 13.0 to 14.0%
Total operating revenue – year over two-year change Up 3.5 to 7.5% Up 3.0 to 5.0%
Adjusted¹ EBITDA margin N/A 16.0 to 18.0%
Fuel cost per gallon $2.11 $2.19
Weighted average share count for the third quarter 17.1 million 17.8 million

Scheduled Service – Year Over Two-Year Comparison

August 2021 August 2019 Change
Passengers 1,179,414 1,241,846 (5.0%)
Revenue passenger miles (000) 1,021,613 1,047,568 (2.5%)
Available seat miles (000) 1,377,398 1,229,543 12.0%
Load factor 74.2% 85.2% (11.0 pts)
Departures 9,451 8,768 7.8%
Average stage length (miles) 835 822 1.6%

Total System* – Year Over Two-Year Comparison

August 2021 August 2019 Change
Passengers 1,185,944 1,256,712 (5.6%)
Available seat miles (000) 1,408,554 1,306,860 7.8%
Departures 9,725 9,294 4.6%
Average stage length (miles) 830 824 0.7%

Scheduled Service – Year Over Year Comparison

August 2021 August 2020 Change
Passengers 1,179,414 633,155 86.3%
Revenue passenger miles (000) 1,021,613 540,317 89.1%
Available seat miles (000) 1,377,398 1,226,370 12.3%
Load factor 74.2% 44.1% 30.1pts
Departures 9,451 8,455 11.8%
Average stage length (miles) 835 835 (0.0%)

Total System* – Year Over Year Comparison

August 2021 August 2020 Change
Passengers 1,185,944 636,485 86.3%
Available seat miles (000) 1,408,554 1,252,758 12.4%
Departures 9,725 8,669 12.2%
Average stage length (miles) 830 833 (0.4%)

*Total system includes scheduled service and fixed fee contract.  System revenue passenger miles and system load factor are not useful statistics as system available seat miles include both ASMs flown by fixed fee flying as well as non-revenue producing repositioning flights used for operational needs.  Fixed fee flying is better measured through dollar contribution versus operational statistics.

Preliminary Financial Results

$ per gallon
August 2021 estimated average fuel cost per gallon – system $2.18

Top Copyright Photo: Allegiant Air Airbus A319-112 N302NV (msn 2387) (Vegas Golden Knights) TUS (Fernandez Imaging). Image: 954949.

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