Allegiant today announced twelve new nonstop routes to popular vacation destinations.
Starting in Spring 2024, the new flights will expand the airline’s network options in 22 cities around the country.
The routes, launching in May, are designed to transport vacationers to some of the airline’s most in-demand destinations.
Additionally, Allegiant has added another Florida airport to its robust network: Orlando International Airport (MCO). This is the first new station Allegiant has added since March 2022.
The new routes to Orlando International Airport (MCO) in Florida include:
Asheville, North Carolina via Asheville Regional Airport (AVL) – beginning May 3, 2024 with one-way fares as low as $49.*
Allentown, Pennsylvania via Lehigh Valley International Airport (ABE) – beginning May 16, 2024 with one-way fares as low as $59.*
Knoxville, Tennessee via McGhee Tyson Airport (TYS) – beginning May 17, 2024 with one-way fares as low as $49.*
The new route to Orlando Sanford International Airport (SFB) in Florida includes:
Routes from Sanford (SFB):
Rapid City, South Dakota via Rapid City Regional Airport (RAP) – beginning May 15, 2024with one-way fares as low as $79.*
The new route to St. Pete-Clearwater International Airport (PIE) in Florida includes:
Bismarck, North Dakota via Bismarck Airport (BIS) – beginning May 15, 2024 with one-way fares as low as $79.*
The new route to Los Angeles International Airport (LAX) in California includes:
Billings, Montana via Billings-Logan International Airport (BIL) – beginning May 16, 2024with one-way fares as low as $59.*
The new route to Nashville International Airport (BNA) in Tennessee includes:
Rockford, Illinois via Chicago Rockford International Airport (RFD) – beginning May 16, 2024 with one-way fares as low as $49.*
The new route to Harry Reid International Airport (LAS) in Nevada includes:
Chattanooga, Tennessee via Chattanooga Metropolitan Airport (CHA) – beginning May 16, 2024 with one-way fares as low as $79.*
The new route to Punta Gorda Airport (PGD) in Florida includes:
Washington D.C. via Dulles International Airport (IAD) – beginning May 16, 2024 with one-way fares as low as $59.*
The new route to Newark Liberty International Airport (EWR) in New Jersey includes:
Appleton, Wisconsin via Appleton International Airport (ATW) – beginning May 17, 2024with one-way fares as low as $59.*
The new route to Fort Lauderdale-Hollywood International Airport (FLL) in Florida includes:
Traverse City, Michigan via Cherry Capital Airport (TVC) – beginning May 17, 2024 with one-way fares as low as $69.*
The new route to Austin-Bergstrom International Airport (AUS) in Texas includes:
Eugene, Oregon via Eugene Airport (EUG) – beginning May 31, 2024 with one-way fares as low as $79.*
Allegiant Travel Company (Allegiant Air) has reported the following financial results for the third quarter 2023, as well as comparisons to the prior year:
Consolidated
Three Months Ended September 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Total operating revenue
$ 565.4
$ 560.3
0.9 %
Total operating expense
583.2
591.2
(1.4) %
Operating loss
(17.9)
(30.9)
42.1 %
Loss before income taxes
(29.9)
(56.2)
46.7 %
Net loss
(25.1)
(46.5)
46.0 %
Diluted loss per share
(1.44)
(2.58)
44.2 %
Sunseeker special charges, net of recoveries (4)
17.4
35.0
(50.3) %
Airline special charges (4)
15.2
0.1
NM
Diluted earnings (loss) per share excluding special charges net of recoveries(1)(5)
0.09
(0.96)
109.4 %
Airline only
Three Months Ended September 30,
Percent Change(2)
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Airline operating revenue
$ 565.4
$ 560.3
0.9 %
Airline operating expense (1)
559.5
553.5
1.1 %
Airline operating income
5.8
6.8
(14.7) %
Airline loss before income taxes (1)
(7.4)
(17.3)
57.2 %
Airline net loss (1)
(5.6)
(15.2)
63.2 %
Airline special charges (4)
15.2
0.1
NM
Airline net income (loss), excluding special charges (1)(3)(6)
5.9
(15.1)
NM
Airline operating margin, excluding special charges (1)(6)
3.7 %
1.2 %
2.5
Airline diluted earnings (loss) per share, excluding special charges (1)(6)
0.31
(0.84)
136.9 %
Consolidated
Nine Months Ended September 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Total operating revenue
$ 1,898.9
$ 1,690.3
12.3 %
Total operating expense
1,688.5
1,687.8
— %
Operating income
210.4
2.4
NM
Income (loss) before income taxes
160.8
(60.9)
364.0 %
Net income (loss)
119.6
(50.0)
339.2 %
Diluted earnings (loss) per share
6.43
(2.78)
331.3 %
Sunseeker special charges, net of recoveries(4)
4.6
35.0
NM
Airline special charges (4)
15.2
0.4
NM
Diluted earnings (loss) per share excluding special charges(1)(5)
7.22
(1.16)
722.4 %
Airline only
Nine Months Ended September 30,
Percent Change(2)
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Airline operating revenue
$ 1,898.8
$ 1,690.3
12.3 %
Airline operating expense(1)
1,668.0
1,645.4
1.4 %
Airline operating income
230.9
44.9
414.3 %
Airline income (loss) before income taxes(1)
181.9
(12.5)
NM
Airline net income (loss)(1)
137.3
(11.0)
1,348.2 %
Airline special charges(4)
15.2
0.4
NM
Airline net income (loss), excluding special charges (1)(3)(6)
148.8
(10.7)
NM
Airline operating margin, excluding special charges(1)(6)
13.0 %
2.7 %
10.3
Airline diluted earnings (loss) per share, excluding special charges (1)(6)
8.00
(0.59)
NM
(1)
Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures.
(2)
Except Airline operating margin, excluding special charges, which is percentage point change.
(3)
Utilizing an airline-only effective tax rate of 24.5% for 2023 and 12.0% for 2022.
(4)
In 2023 and 2022, we recognized as special charges the full amount of estimated property damage to Sunseeker Resortdue to weather and other insured events less the amount of recognized insurance recoveries through the end of the applicable period. In 2023 we also recognized accelerated depreciation as special charges related to our revised fleet plan. We sometimes refer to these amounts as “specials” in this earnings release.
(5)
Adjusted to exclude the impacts of property damage to Sunseeker Resort, net of recoveries, and aircraft accelerated depreciation charges resulting from our revised fleet plan, as described above.
(6)
Adjusted to exclude accelerated depreciation charges related to our revised fleet plan, as described above.
NM
Not meaningful
*
Note that amounts may not recalculate due to rounding
“I am excited to be back in the role of CEO, particularly as the team continues to deliver strong operational and financial performance”, stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “The third quarter marked another quarter of airline operating profits, excluding special charges. Year to date we have delivered industry-leading financial performance yielding an adjusted airline-only operating margin of 13 percent. These accomplishments are directly attributable to Team Allegiant. You are the best in the industry, and I thank you for all your hard work and dedication.
“As we move into the fourth quarter, we are all but done with the completion of Sunseeker Resort. Construction crews are wrapping up the last details, and we expect the property to open on December 15. A main driver behind my endorsement of this property was the quality of the management team. They have navigated the project from its inception nearly five years ago and they are world renowned. My conviction around the success of the property remains strong, and I am thrilled to begin realizing the benefits that Sunseeker Resort will provide.
“One of our primary focuses remains on enhancing our brand. The Allegiant credit card continues to materially impact the bottom line through new cardholder acquisitions and continued increases in cardholder spend. Year to date, we have received $88 million in remuneration from our partner, Bank of America. We expect this number to continue growing. Our investment in the Allegiant Extra product also continues to surpass our expectations. Currently 14 aircraft have been retrofitted with this product and we expect roughly one-third of the fleet to be retrofitted by the end of 2024. These diversified revenue streams, coupled with our unique, low-utilization model will continue to differentiate us from our peers.”
“I am proud of the teams’ efforts to deliver another profitable quarter in what is historically our weakest quarter of the year,” stated Gregory Anderson, president of Allegiant Travel Company. “Despite fuel costs rising nearly 30 percent intra-quarter, the team delivered an airline-only adjusted earnings per share of $0.31 driven by an increase in TRASM of 1.4 percent over the prior year. This increase in unit revenue was extra impressive given the unprecedented strength of off-peak leisure demand during the same period last year. While leisure demand during our peak periods continues to outperform pre-pandemic levels, we experienced a return of normalization during the off-peak periods. Our ability to match capacity with leisure demand trends was nicely put on display as we reduced capacity by 45 percent during the off-peak period of September versus the peak season of July.
“We are continuing to strengthen our foundation by reinvesting back into the airline’s future. During the third quarter, we successfully launched SAP and Navitaire – technology enhancements that will support our planned growth for years to come. Furthermore, we have readied ourselves for the delivery of our first Boeing 737 MAX aircraft in early 2024. This aircraft will strengthen our flexibility by providing more diversity in fleet composition further enabling us to deploy the right gauge aircraft in the right markets at the right times.
“It’s an exciting time to be part of Team Allegiant. Several of our major initiatives will take shape in the coming months. These initiatives, coupled with our differentiated model, will help drive the long-term success of the company. This could not be achieved without the dedication and efforts of our team members throughout the organization. You are inspiring, and I extend my sincerest thanks.”
Third Quarter 2023 Results and Highlights
Income before income tax, excluding specials(1)(3)(4)of $2.7M, yielding a pre-tax margin of 0.5%
Airline-only income before income tax, excluding specials(1)(5) of $7.9M, yielding a pre-tax margin of 1.4%
Operating income, excluding specials(1)(3)(4) of $14.7M, yielding an operating margin of 2.6%
Airline-only operating income, excluding specials(1)(5) of $21.0M, yielding an airline-only operating margin of 3.7%
Consolidated EBITDA, excluding specials(1)(3)(4) of $70.3M, yielding an EBITDA margin of 12.4%
Airline-only EBITDA, excluding specials(1)(5) of $76.6M a 13.5% margin
Total operating revenue of $565.4M, up 0.9% over the prior year and the highest third-quarter total in company history
Total fixed fee contracts revenue of $17.7M, up 11.7% year-over-year
TRASM(2) of 12.78 ¢, up 1.4% year-over-year on scheduled service capacity decrease of 0.8% year-over-year
When compared to 2019, we are the only US carrier, among carriers having reported third quarter results, to be up more than 10 percent in both system available seat miles (ASMs) and TRASM(2) during the quarter as well as year to date
Total average fare of $129.23, up 2.6% year-over-year
Total average ancillary fare of $71.80, up 11.0% year-over-year
$88 million in year-to-date remuneration received from Bank of America, up 26% from the prior year
Announced a collaboration with global entertainment icon Carrie Underwood in support of the company’s Allways Rewards Visa® card and loyalty program
Allways Rewards program enrolled 478K new members during the quarter, bringing total members to 16.7M
Airline-only operating CASM, excluding fuel and special charges(3), of 8.49 ¢, up 9.5% year-over-year
Includes $18.7M in incremental cost related to accrual of pilot retention bonuses
Excludes $15.2M in accelerated depreciation related to the early retirement of 21 airframes to be retired between 2023 through 2025
Year to date 2023 Results
Income before income tax, excluding specials(1)(3)(4)of $180.6M yielding a pre-tax margin of 9.5%
Operating income, excluding specials(1)(3)(4) of $230.2M, yielding an operating margin of 12.1%
Consolidated EBITDA, excluding specials(1)(3)(4) of $394.4M, yielding an EBITDA margin of 20.8%
(1)
Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures.
(2)
TRASM represents total passenger revenue per scheduled service available seat mile.
(3)
In 2023 and 2022, we recognized as special charges the full amount of estimated property damage to Sunseeker Resortdue to weather and other insured events less the amount of recognized insurance recoveries through the end of the applicable period. In 2023 we also recognized accelerated depreciation as special charges related to our revised fleet plan.
(4)
Adjusted to exclude the impacts of property damage to Sunseeker Resort, net of recoveries, and aircraft accelerated depreciation charges resulting from our revised fleet plan, as described above.
(5)
Adjusted to exclude accelerated depreciation charges related to our revised fleet plan, as described above.
Balance Sheet, Cash and Liquidity
Total available liquidity at September 30, 2023 was $1.3B, which included $1.0B in cash and investments, and $279.9M in undrawn revolving credit facilities and PDP facilities
$24.5M in cash from operations during the third quarter 2023
Total debt at September 30, 2023 was $2.3B
Net debt at September 30, 2023 was $1.3B
Secured $412M in financing commitments during the quarter of which $196M was used to refinance seven Airbus A320 aircraft and $216M is committed to finance four Boeing 737 MAX aircraft to be delivered in 2024
Debt principal payments of $143.5M during the third quarter
Includes $113M prepayment of aircraft-secured facilities during the quarter
Year-to-date principal payments of $293M, including a total of $174M in prepayments
Issued notice to call $150M, 8.5% senior secured notes with the balance to be paid during the fourth quarter
Returned $11M in dividends during the third quarter
Air traffic liability at September 30, 2023 was $395.8M
Airline Capital Expenditures
Third quarter capital expenditures of $157.6M, which included $112.1M for aircraft purchases and inductions, pre-delivery deposits, and other related costs, and $45.5M in other airline capital expenditures
Third quarter deferred heavy maintenance spend was $13.8M
Sunseeker Resort Charlotte Harbor
Total capital expenditures(1) as of September 30, 2023 were $653M
Third quarter capital expenditures(1) were $71.6M
Recorded a special charge, net of insurance recoveries, of $17.4M during the third quarter 2023 related to estimated property damages at Sunseeker Resort resulting from various weather events, including Hurricane Idalia
(1)
Total capital expenditures is inclusive of Sunseeker Resort, Aileron Golf Club, remediation work related to weather and insurance events, accrued expenditures not yet paid and pre-COVID expenditures included as part of the COVID impairment. Capitalized interest, operating expenses, special charges related to COVID, and estimated losses related to insurance events have been excluded from these figures.
Guidance, subject to revision
Full-year 2023 guidance
Previous
Current
System ASMs – year over year change
0 to 3%
~1.8%
Scheduled service ASMs – year over year change
0 to 3%
~1.5%
Fuel cost per gallon
$ 2.90
$ 3.12
Available seat miles (ASMs)/gallon
~84
~84
Depreciation expense (millions)
$230 to $235
$225 to $230
Interest expense (millions)
$145 to $150
$145 to $150
Capitalized interest (1) (millions)
($30) to ($35)
($40) to ($45)
Interest income (millions)
$40 to $45
$40 to $45
Earnings per share – airline only, excluding specials(2)
$10.50 – $13.00
$7.75 to $8.50
Loss per share – Sunseeker, excluding specials (3)
~($1.25)
~($1.75)
Airline CAPEX
Aircraft, engines, induction costs, and pre-delivery deposits (millions)(4)
$490 to $500
$430 to $440
Capitalized deferred heavy maintenance (millions)
$60 to $70
$60 to $70
Other airline capital expenditures (millions)
$140 to $145
$150 to $155
Recurring principal payments (millions)
$210 to $215
$150 to $155
Sunseeker Resort Charlotte Harbor Project (millions)
Total projected capital expenditures (5)
$695
$720
Capital expenditures funded or expected to be funded by Allegiant
$370
Project debt incurred through September 30, 2023
$350
(1)
Includes capitalized interest related to Sunseeker as well as on pre-delivery deposits on new aircraft.
(2)
Earnings per share calculation is airline only. It includes accruals for increases in pilot and flight attendant compensation beginning in May. Actual results will differ based on economic terms agreed upon and the timing of the collective bargaining agreements. These differences may be material.
(3)
Excludes recoveries that may be received related to business interruption insurance claim.
(4)
Excludes capitalized interest related to pre-delivery deposits on new aircraft.
(5)
Total projected capital expenditures does not reflect the impairment or special charges related to COVID or insurance claims. Excludes amounts to remediate physical damage to the property resulting from Hurricane Ian, or other subsequent insurance events.
Aircraft Fleet Plan by End of Period
Aircraft – (seats per AC)
1Q23
2Q23
3Q23
YE23
A319 (156 seats)
35
35
35
35
A320 (177 seats)
19
19
19
19
A320 (180-186 seats)
70
72
73
73
Total
124
126
127
127
The table above is provided based on the company’s current plans and is subject to change. The numbers exclude aircraft expected to be delivered before the end of 2023 for revenue service beginning in 2024.
Top Copyright Photo: Allegiant Air Airbus A319-111 N322NV (msn 2528) SNA (Michael B. Ing). Image: 961849.
Allegiant Travel Company (NASDAQ: ALGT) is thrilled to announce a collaboration with eight-time GRAMMY® Award winner and three-time ACM Entertainer of the Year Carrie Underwood, in support of the company’s Allways Rewards Visa® card and loyalty program.
The collaboration focuses on a series of commercials that highlight Carrie’s small-town roots, staying connected with the people, places and experiences that matter most while illustrating how the Allways Rewards Visa® card helps cardholders “Live their best Nonstop Life®”.
Global entertainment icon Carrie Underwood will partner with Allegiant in support of the company’s Allways Rewards Visa® credit card and loyalty program. (PRNewsfoto/Allegiant Travel Company)
In addition to their small-town roots, Carrie and Allegiant have something else in common: a partnership with Make-A-Wish®.
Since 2012, Allegiant has been helping the national nonprofit grant wishes for kids across the country by providing them with airfare to their wish destinations. Carrie has been involved with the organization for more than 15 years, granting wishes since the beginning of her recording career. Most recently, she arranged for a donation of $1 from each ticket sold for her ongoing REFLECTION: The Las Vegas Residency, which debuted in 2021 and has recently been extended into 2024, to be contributed to Make-A-Wish.
“I really responded to Allegiant’s mission to make travel accessible and affordable for people who may not live near a big city airport, helping them to live their own best ‘nonstop’ lives,” says Underwood. “I also appreciate the company’s history of giving back, which is important to me in everything I do.”
Allegiant will officially kick off Underwood’s partnership through a national advertising campaign, with the first national spot airing during Thursday Night Football on Amazon Prime when the Buffalo Bills take on the Tampa Bay Buccaneers Oct. 26.
Allegiant Travel Company (Allegiant Air) has announced it will relocate its Nashville International Airport’s® (BNA®) operations from Concourse B to the brand new Satellite Concourse, setting the stage for the airline’s next phase of growth at BNA.
The Las Vegas-based airline will begin operating at the C Gate Satellite Concourse Saturday, Oct. 21. Allegiant passengers will now board and deplane their aircraft in a new state-of-the-art facility designed to enhance their overall travel experience.
The move will allow the leisure travel-focused carrier to offer a more robust schedule of flights that includes opportunities for future expansion at BNA. Allegiant passengers will also be able to enjoy the amenities the new facility offers, such as expanded seating areas and dining and vendor options, while waiting for their flights.
Since beginning service in 2018, Allegiant has flown more than 1.9 million passengers through BNA.
In February 2020, Allegiant established BNA as a three-aircraft base of operations, creating 66 new high-wage jobs in the process and investing $50 million in infrastructure and equipment. Nashville, a booming city known for its rich cultural history, iconic music and world-class culinary scenes, has quickly become one of the most popular destinations in the country. Allegiant’s service has proven to be so popular that the airline added a fourth aircraft and additional crews and team members to better serve its BNA customers. Currently, the airline employs 111 team members at BNA.
Allegiant now serves 31 cities from BNA throughout the year. Of those cities, 19 routes are unique to Allegiant – meaning no other airlines offer nonstop service on those routes. In July 2023,
Allegiant announced it will add new service to Fort Lauderdale/Hollywood, Fla., beginning November 16.
Allegiant Travel Company (Allegiant Air) has announced financing commitments for seven Airbus A320 and four Boeing 737 MAX aircraft from BNP Paribas, Europe’s leading bank, and Jackson Square Aviation (JSA), a leading global commercial aircraft lessor.
The innovative $412M deal combines banking and lessor capital to secure Allegiant’s aircraft financing needs into the second quarter 2024, while providing the airline with healthy liquidity at an attractive cost in today’s market.
Allegiant has drawn down $196 million on September 29, and the remainder will be drawn commensurate with its initial 737 MAX deliveries.
Allegiant currently operates an all-Airbus fleet comprised of 127 Airbus A319s and A320s.
Allegiant has agreed to purchase up to 130 Boeing 737-7 and 737-8-200 models in a multi-year deal, Boeing’s first with an ultra-low-cost carrier in the United States. The new 737 MAX additions will afford the airline flexibility, environmental benefits, and new customer features.
Allegiant Travel Company (Allegiant Air) has announced that John Redmond has resigned as chief executive officer and as a member of the Board of Directors effective immediately. Maurice J. Gallagher, former CEO, current executive chairman and one of the Company’s largest stockholders, will resume the CEO role.
“I am grateful to the board for giving me the opportunity to be a part of this incredible organization,” said Redmond. “I’m particularly proud of the Sunseeker team we’ve put in place, and I know they will carry the project over the finish line and establish the hotel as a premier destination in Southwest Florida.”
Gallagher, an innovator in the aviation industry, will also maintain his role as chairman of Allegiant’s board.
“We have built a management team headed by Greg Anderson, President, and many other talented and dedicated executives that is among the best in the industry,” Gallagher said. “This team is well-positioned to lead the Company as we continue to set the standard for the U.S. leisure travel sector.”
In addition to Allegiant’s air operations, the company has expanded its service lines into other areas of the leisure and hospitality industry, including Sunseeker Resort at Charlotte Harbor, Florida, slated to open in Q4 2023.
“We’re excited about completing construction and opening Sunseeker Resort,” continued Gallagher. “Industry veteran Micah Richins and his experienced team will continue to lead Sunseeker and we look forward to a successful opening and operation.”
Richins has an extensive hospitality background. Before joining Sunseeker, a subsidiary of Allegiant Travel Company, Richins operated some of the world’s largest and most successful integrated resorts, including MGM Grand, New York-New York and the Luxor. He has managed and overseen every aspect of hotel management, implementing corporate strategies for revenue management, entertainment, and customer service. Richins and his executive team have more than 75 years of experience, combined, in the hospitality industry.
Anderson was appointed president of Allegiant in 2022. Since joining the company in 2010, he has held several leadership roles, including senior vice president – treasury, principal accounting officer, and chief financial officer. Prior to joining Allegiant, he worked in corporate accounting for U.S. Airways.
Gallagher has spent more than four decades developing and building successful airline business models, culminating with Allegiant. When Gallagher took control of Allegiant in 2001, it had one airplane and was just emerging from bankruptcy. Gallagher has grown the Company into one of the most profitable airlines in the world with more than 120 aircraft, operating more than 550 routes across more than 120 cities in the United States.
JetBlue Airways Corporation and Allegiant today announced that the airlines have entered into a definitive agreement under which JetBlue will transfer to Allegiant all of the holdings of Spirit Airlines, Inc. at Boston Logan International Airport and Newark Liberty International Airport.
JetBlue will also turn over up to five gates and related ground facilities at Fort Lauderdale-Hollywood International Airport to promote ultra-low-cost carrier growth.
On June 1, JetBlue announced that it will divest all of Spirit’s holdings at New York’s LaGuardia Airport to Frontier. Together, these divestitures are part of JetBlue’s voluntary upfront commitments included in the merger agreement with Spirit and are conditioned on the closing of the JetBlue-Spirit transaction.
The divestitures are subject to approval by the local airport authorities as well as FAA/DOT, and are conditioned upon and will occur after the closing of JetBlue’s planned combination with Spirit. JetBlue expects to close the transaction with Spirit in the first half of 2024.
Under the terms of the agreement, JetBlue has agreed to transfer to Allegiant all of Spirit’s holdings in Boston and Newark, principally consisting of two gates in Boston, two gates in Newark, and 43 takeoff and landing authorizations in Newark. In addition, JetBlue has agreed to relinquish up to five gates at Fort Lauderdale to the Broward County Aviation Department and will work closely with the Department to facilitate Allegiant’s ULCC growth at FLL using these gates.
Technicians at Allegiant Air have overwhelmingly voted to ratify a two-year contract extension with the Teamsters. The total economic improvements in the contract amount to $70 million, including immediate average wage increases of 27 percent.
“Licensed airframe and powerplant technicians in the aviation industry have to uphold high safety and regulatory requirements to protect the flying public and flight crews,” said Joe Ferreira, Teamsters Airline Division Director. “These wage increases are well earned and reflect our members’ responsibility.”
The contract ratification follows another recent victory for workers at the company – in May, Allegiant Air flight dispatchers also ratified their extension, with more than 95 percent voting in favor of the deal.
Allegiant Air has announced that the company and the International Brotherhood of Teamsters (IBT), representing Allegiant’s maintenance technicians and related employees, have ratified a new contract agreement on a two-year extension to the union’s initial collective bargaining agreement. The employee group includes line and heavy maintenance technicians as well as stores employees and some administrative maintenance staff.
The tentative agreement was ratified by the Allegiant maintenance technicians and related workforce with a 75.5 percent approval vote. Allegiant currently employs 683 maintenance technician and related employees.
The process of negotiating the new collective bargaining agreement for Allegiant maintenance technician and related employees was swift and was reached more than 3 years before the current contract became amendable. The ratified agreement provides for significant increases in rates and a two-year extension to the amenable date of the current bargaining agreement, bringing the new amendable date to October 31, 2028.
Allegiant Air Airbus A320-214 WL N247NV (msn 7704) LAS (Jay Selman). Image: 404293.
Allegiant Travel Company (Allegiant Air) reported the following financial results for the second quarter 2023, as well as comparisons to the prior year:
Consolidated
Three Months Ended June 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Total operating revenue
$ 683.8
$ 629.8
8.6 %
Total operating expense
550.4
603.7
(8.8) %
Operating income
133.4
26.1
411.1 %
Income before income taxes
116.3
5.8
NM
Net income
88.5
4.4
NM
Diluted earnings per share
4.80
0.24
NM
Sunseeker special charges, net of recovery (5)
(11.2)
—
NM
Diluted earnings per share excluding recovery of Sunseeker special charges(1)(4)(5)
4.35
0.24
NM
Airline only
Three Months Ended June 30,
Percent Change(2)
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Airline operating revenue (1)
$ 683.8
$ 629.8
8.6 %
Airline operating expense (1)
556.3
602.0
(7.6) %
Airline operating income(1)
127.5
27.9
357.0 %
Airline income before income taxes (1)
110.4
10.4
961.5 %
Airline net income (1)(3)
84.2
7.7
993.5 %
Airline operating margin
18.6 %
4.4 %
14.2 %
Airline diluted earnings per share(1)
4.57
0.43
962.8 %
Consolidated
Six Months Ended June 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Total operating revenue
$ 1,333.5
$ 1,130.0
18.0 %
Total operating expense
1,105.2
1,096.6
0.8
Operating income
228.3
33.4
583.5
Income (loss) before income taxes
190.8
(4.7)
NM
Net income (loss)
144.6
(3.5)
NM
Diluted earnings (loss) per share
7.84
(0.20)
NM
Sunseeker special charges, net of recovery (5)
(12.8)
—
NM
Diluted earnings per share excluding recovery of Sunseeker special charges(1)(4)(5)
7.35
(0.20)
NM
Airline only
Six Months Ended June 30,
Percent Change(2)
(unaudited) (in millions, except per share amounts)
2023
2022
YoY
Airline operating revenue (1)
$ 1,333.5
$ 1,130.0
18.0 %
Airline operating expense (1)
1,108.4
1,091.9
1.5
Airline operating income(1)
225.1
38.1
490.8
Airline income before income taxes (1)
189.2
4.7
NM
Airline net income (1)(3)
144.2
3.7
NM
Airline operating margin
16.9 %
3.4 %
13.5
Airline diluted earnings per share(1)
7.81
0.20
NM
(1)
Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures.
(2)
Except Airline Operating Margin, which is percentage point change.
(3)
Utilizing an effective tax rate of 23.7% and 23.8% for quarter-to-date and year-to-date 2023 and 25.4% and 21.4% for quarter-to-date and year-to-date 2022, respectively.
(4)
Adjusted to exclude insurance recoveries from property damage to Sunseeker Resort.
(5)
In 2022, we recognized the full amount of estimated property damage to Sunseeker Resort due to Hurricane Ian and other insured events less the amount of recognized insurance recoveries through the end of the applicable period. The negative amount of special charges we are reporting in 2023 reflects further insurance recoveries either received or determined to be probable of collection. We sometimes refer to this negative amount as “specials” in this earnings release.
NM
Not meaningful
“Second quarter diluted earnings per share, excluding special items was $4.35, a more than six-fold improvement over the second quarter of 2022,” stated John Redmond, CEO of Allegiant Travel Company. “These outstanding results are attributable to the hard work of our team members during this peak summer travel period. The team delivered industry-leading operational performance with a controllable completion of 99.7 percent for the quarter.”We recognized a record $684 million in total operating revenue for the second quarter, evidence of a robust leisure demand environment. Capacity increased slightly, up 1.3 percent year-over-year, with TRASM increasing 7.5 percent over the second quarter of 2022. During the second quarter, total ancillary per passenger was $71.75, an 8.6 percent increase over the prior year. This strength is driven by early success with the Allegiant Extra product and sustained growth with our Allegiant Allways cobrand credit card. Our direct-to-consumer approach helps underpin our ability to enhance revenues.”As we head into the second half of the year, our focus remains on three primary objectives. First, we will make progress on outstanding labor contracts that our team members are proud to support. Second, we will continue delivering a solid operation. Finally, we are only a few short months from the long awaited opening of our world-class, Sunseeker Resort, in Port Charlotte, Florida. Construction is entering the final stages, and the operations teams are beginning to hire personnel in earnest. We remain on track to open the property mid-October.”I could not be happier with the success the team delivered this quarter. Achieving industry-leading operational performance in the backdrop of a challenging operational environment is admirable. This operational success has been the catalyst for the strong financial performance delivered year-to-date.”Second Quarter 2023 Results and Highlights
Income before income tax, excluding specials(1)(3) of $105.1 million, yielding a pre-tax margin of 15.4 percent
Airline-only income before income tax(1) of $110.4 million, yielding a pre-tax margin of 16.1 percent
Operating income, excluding specials(1)(3) of $122.2 million, yielding an operating margin of 17.9 percent
Airline-only operating income(1) of $127.5 million, yielding an airline-only operating margin of 18.6 percent
Consolidated EBITDA, excluding specials(1)(3) of $176.1 million, yielding an EBITDA margin of 25.8 percent
Airline-only EBITDA(1) of $181.3 million, a 26.5 percent margin
Total operating revenue was $683.8 million, up 8.6 percent over the prior year and the highest quarterly total in company history
Total fixed fee contracts revenue of $11.7 million, up 31.6 percent year-over-year
TRASM(2) of 13.64 cents, up 7.5 percent year-over-year on scheduled service capacity increase of 0.7 percent year-over-year
Total average fare of $142.31, up 8.1 percent year-over-year
Total average ancillary fare of $71.75, up 8.6 percent year-over-year
Surpassed 600 thousand Allways rewards credit card holders during the quarter
Received $29 million in remuneration during the quarter
Transitioning our cobrand credit card network from Mastercard to Visa
Core program and benefits will remain the same, but this transition is expected to boost program revenue through higher levels of new cardholders and increased cardholder spend
Allways Rewards program enrolled 570 thousand new members during the quarter, bringing total members to 16.5 million
Paid out over $12 million to our airline team members in profit share for the first half of the year
Airline-only Operating CASM, excluding fuel, of 7.79 cents, up 12.9 percent year-over-year
Includes $12 million in incremental cost related to pilot retention bonuses
Allegiant flight dispatchers ratified contract with International Brotherhood of Teamsters, extending the contract through May 31, 2026
In early July, expanded the network by announcing six new routes
Pledged $1 million to Boys & Girls Clubs of America to develop and launch a new program that will inspire children to choose future careers in aviation
(1)
Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures.
(2)
TRASM represents total passenger revenue per scheduled service available seat mile.
(3)
In 2022, we recognized the full amount of estimated property damage to Sunseeker Resort due to Hurricane Ian and other insured events less the amount of recognized insurance recoveries through the end of the applicable period. The negative amount of special charges we are reporting in 2023 reflects further insurance recoveries either received or determined to be probable of collection. We sometimes refer to this negative amount as “specials” in this earnings release.
Balance Sheet, Cash and Liquidity
Total available liquidity at June 30, 2023 was $1.4 billion, which included $1.0 billion in cash and investments, and $356.2 million in undrawn revolving credit facilities and PDP facilities
$131.2 million in cash from operations during the second quarter 2023
Total debt at June 30, 2023 was $2.2 billion
Net debt at June 30, 2023 was $1.1 billion
Debt principal payments of $97.9 million during the second quarter
Includes $61 million prepayment of an aircraft-secured facility during the quarter
Declared annual cash dividend in the amount of $2.40 per share payable $0.60 per quarter with the first dividend to be paid September 1, 2023 to shareholders of record on August 15, 2023
Air traffic liability at June 30, 2023 was $411.1 million
Airline Capital Expenditures
Second quarter capital expenditures of $176 million, which included $147 million for aircraft purchases and inductions, pre-delivery deposits, and other related costs, and $29 million in other airline capital expenditures
Second quarter deferred heavy maintenance spend was $22 million
Sunseeker Resort Charlotte Harbor
Total capital expenditures(1) as of June 30, 2023 were $611 million
Second quarter capital expenditures(1) were $92 million
Previously recorded special charges were reduced by $11.3 million for recognized insurance recoveries related to outstanding insurance claims at Sunseeker Resort
(1)
Total capital expenditures is inclusive of Sunseeker Resort, Aileron Golf Club, remediation work related to insurance events, accrued expenditures not yet paid and spend included as part of the COVID impairment. Capitalized interest, operating expenses, special charges related to COVID, and estimated losses related to insurance events have been excluded from this total.
Guidance, subject to revision
Full-year 2023 guidance
Previous
Current
System ASMs – year over year change
0 to 3%
0 to 3%
Scheduled service ASMs – year over year change
0 to 3%
0 to 3%
Fuel cost per gallon
$ 3.00
$ 2.90
Available seat miles (ASMs)/gallon
~84
~84
Depreciation expense (millions)
$230 to $240
$230 to $235
Interest expense (millions)
$150 to $160
$145 to $150
Capitalized interest (1) (millions)
($35) to ($45)
($30) to ($35)
Interest income (millions)
$35 to $45
$40 to $45
Earnings per share – airline only(2)
$9.00 – $13.00
$10.50 – $13.00
Loss per share – Sunseeker (3)
~($1.25)
~($1.25)
Airline CAPEX
Aircraft, engines, induction costs, and pre-delivery deposits (millions)(4)
$550 to $570
$490 to $500
Capitalized deferred heavy maintenance (millions)
$50 to $60
$60 to $70
Other airline capital expenditures (millions)
$130 to $150
$140 to $145
Recurring principal payments (millions)(5)
$175 to $185
$210 to $215
Sunseeker Resort Charlotte Harbor Project (millions)
Total projected capital expenditures (6)
$695
$695
Capital expenditures funded or expected to be funded by Allegiant
$345
Project debt incurred through June 30, 2023
$350
(1)
Includes capitalized interest related to Sunseeker as well as on pre-delivery deposits on new aircraft.
(2)
Earnings per share calculation is airline only. It includes accruals for increases in pilot and flight attendant compensation beginning in May. Actual results will differ based on economic terms agreed upon and the timing of the collective bargaining agreements. These differences may be material.
(3)
Excludes recoveries that may be received related to business interruption insurance claim.
(4)
Excludes capitalized interest related to pre-delivery deposits on new aircraft.
(5)
Includes $61 million related to aircraft debt prepayment.
(6)
Total projected capital expenditures does not reflect the impairment or special charges related to COVID or insurance claims. Excludes amounts to remediate physical damage to the property resulting from Hurricane Ian, or other subsequent insurance events.
Aircraft Fleet Plan by End of Period
Aircraft – (seats per AC)
1Q23
2Q23
3Q23
YE23
A319 (156 seats)
35
35
35
35
A320 (177 seats)
19
19
19
19
A320 (180-186 seats)
70
72
73
73
Total
124
126
127
127
The table above is provided based on the company’s current plans and is subject to change. The numbers exclude aircraft expected to be delivered before the end of 2023 for revenue service beginning in 2024.
Top Copyright Photo: Allegiant Air Airbus A320-214 WL N247NV (msn 7704) LAS (Jay Selman). Image: 404293.