Allegiant reports GAAP Income before income taxes of $5.8 million in the second quarter

Allegiant Travel Company (Allegiant Air) today reported the following financial results for the second quarter 2022, as well as comparisons to prior years:

Consolidated Three Months Ended June 30, Percent Change
(unaudited) (in millions, except per share amounts) 2022 2021 2019 YoY Yo3Y
Total operating revenue $           629.8 $           472.4 $            491.8 33.3 % 28.1 %
Total operating expense 603.7 333.6 383.7 81.0 57.4
Operating income 26.1 138.9 108.1 (81.2) (75.8)
Income before income taxes 5.8 122.6 91.8 (95.2) (93.6)
Net income 4.4 95.0 70.5 (95.4) (93.8)
Diluted earnings per share $              0.24 $              5.49 $              4.33 (95.6) (94.5)
Six Months Ended June 30, Percent Change
(unaudited) (in millions, except per share amounts) 2022 2021 2019 YoY Yo3Y
Total operating revenue $        1,130.0 $           751.6 $            943.4 50.3 % 19.8 %
Total operating expense 1,096.6 588.1 744.2 86.5 47.4
Operating income 33.4 163.5 199.2 (79.6) (83.3)
Income (loss) before income taxes (4.7) 131.2 165.7 (103.6) (102.9)
Net income (loss) (3.5) 101.9 127.7 (103.5) (102.8)
Diluted earnings (loss) per share $            (0.20) $              6.04 $              7.84 (103.3) (102.6)
(1) Recognition bonus awarded despite not meeting internal profit-sharing targets
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information

“Demand surged in the second quarter resulting in the highest revenue-generating quarter in company history,” stated John Redmond, CEO of Allegiant Travel Company. “Total operating revenue was up over 28 percent as compared with 2019. We saw impressive increases in TRASM of over 15 percent, year over three-year, particularly considering scheduled capacity was up over 13 percent. Earnings per share, adjusted to exclude the impact from the 2022 recognition bonus, was $0.62, pressured by lower productivity levels due to heightened fuel prices and a challenging operating environment.

“As we head into the third quarter, we continue to focus on operational integrity, ensuring safe and reliable travel for our customers. Our operations and planning teams have made significant progress combating the challenges present within the current operating environment. We have seen significant improvements in reliability into the third quarter, with a July controllable completion factor of 99 percent, as compared with 97 percent in June. We expect to finish the quarter with a controllable completion of over 99 percent.

“Looking ahead to 2023, we remain focused on improving margins and our major strategic initiatives, including integration of the Boeing MAX fleet, and the opening of Sunseeker Resort Charlotte Harbor. These are major undertakings for the company, but I believe these ventures will create significant shareholder value in the coming years. Retaining our talented leaders is critical to ensuring success with these initiatives. I was pleased to announce the appointments of Scott Sheldon and Gregory Anderson to President. Their superior leadership skills and combined 30 years of experience at Allegiant will play an integral role in the long-term success of the company.

“In closing, I am humbled by the hard work and dedication of our more than 5,000 team members across the network. This industry is not for the faint of heart, but we truly have the best employees. I cannot thank them enough for making Allegiant the successful airline we are today.”

Second Quarter 2022 Results

     • GAAP Income before income taxes of $5.8 million
° Excluding recognition bonus (1) , achieved a pre-tax margin of 2.4 percent
     • GAAP operating income of $26.1 million, yielding an operating margin of 4.1 percent
° Operating margin, adjusted to exclude recognition bonus (1) of 5.6 percent
     • Consolidated EBITDA(2) of $75.3 million, yielding an EBITDA margin of 12 percent
     • Total operating revenue was $629.8 million, up 28.1 percent year over three-year
° The month of June was the highest revenue-generating month in company history in both absolute dollars and unitized on a revenue per flight basis
     • Total system capacity up 12.2 percent year over three-year
° Sequential improvement in load factor of over eight points from the first quarter, with June loads of roughly 90 percent
        ° TRASM up 15.7 percent for the quarter versus 2019, despite a 13.4 increase in scheduled service capacity
        ° Total average fare of $131.69, up 15.0 percent from the second quarter of 2019
° Total average fare – air-related charges of $60.19, up 16.5 percent from 2019, driven predominantly by strength in bundled ancillary
° Total average fare – third party products of $5.90, up 34.1 percent year over three-year driven by Allways Allegiant World Mastercard strength
° Acquired 42 thousand new Allways Allegiant World Mastercard holders during the quarter, up 65 percent from 2019
° Year-to-date remuneration from Bank of America up 129 percent, year over three-year
     • Operating CASM, excluding fuel and recognition bonus (1) (2) of 6.76 cents, up 14.0 percent when compared with the second quarter of 2019
     • Expanded the network by announcing 10 new routes during the quarter, bringing total routes served to 610 and 128 cities

(1) Recognition bonus awarded despite not meeting internal profit-sharing targets
(2) Denotes a non-GAAP financial measure. 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, 2022 were $1.2 billion
     • $227.8 million in total operating cash inflow for the second quarter 2022
     • Total debt at June 30, 2022 was $2.0 billion
° Net debt at June 30, 2022 was $752.2 million
° Received $87.5 million during the quarter in prearranged financing related to Sunseeker project
° Raised $108 million in aircraft-backed debt
     • Debt principal payments of $33.2 million during the quarter
     • In August 2022, secured a $100 million revolving credit facility with MUFG
     • Air traffic liability at June 30, 2022 was $451.1 million
° Balance related to future scheduled flights is $392.5 million
° Balance related to travel vouchers issued for future use is $58.6 million

Airline Capital Expenditures

• Second quarter capital expenditures of $74 million, which includes $39 million for aircraft pre-delivery deposits, the purchase of one A320 aircraft, and $35 million in other airline capital expenditures
° Second quarter deferred heavy maintenance spend was $13 million
• Full-year 2022 capital expenditures expected to be roughly $380 million, a slight increase from initial expectations, which includes $240 million for aircraft purchases, inductions, and pre-delivery deposits, and $140 million in other airline capital expenditures
° Full-year 2022 deferred heavy maintenance spend expected to be $60 million, a slight reduction from initial expectations

Sunseeker Resort Charlotte Harbor

     • Total project spend as of June 30, 2022 was $346 million with $158 million funded by debt and the remaining $188 million funded by Allegiant
° Second quarter capital expenditures were $70 million relating to the Sunseeker Resort Charlotte Harbor and $4 million related to other Sunseeker capital expenditures

Allegiant Air aircraft photo gallery: