Category Archives: Allegiant Air

Allegiant celebrates it 40th consecutive profitable quarter

Allegiant Travel Company (Allegiant Air) (Las Vegas) is celebrating its 40th consecutive profitable quarter. The company produced a net profit of $14.8 million in the fourth quarter (up from a net profit of $10.8 million in the same quarter a year ago) and a net profit of $78.6 million for 2012 (up from a net profit of $49.4 million in 2011). The travel company specializes in serving small markets with limited service to popular vacation destinations. The company issued the following financial results and details for the fourth quarter 2012 and full year results for 2012:

Allegiant Travel Company reported the following financial results for both the fourth quarter and full year 2012, as well as comparisons to prior year equivalents:

Unaudited	4Q12	4Q11	Change	2012	2011	Change
Total operating revenue (millions)	$222.8	$193.9	14.9%	$908.7	$779.1	16.6%
Operating income (millions)	$25.4	$20.2	25.8%	$132.3	$85.4	54.8%
Operating margin	11.4%	10.4%	1.0pp	14.6%	11.0%	3.6pp
EBITDA (millions)	$42.2	$31.3	34.7%	$190.1	$127.4	49.2%
EBITDA margin	18.9%	16.2%	2.7pp	20.9%	16.4%	4.5pp
Net income (millions)	$14.8	$10.8	36.6%	$78.6	$49.4	59.1%
Diluted earnings per share	$0.76	$0.56	35.7%	$4.06	$2.57	58.0%

“We are very proud to report our 40^th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “40 consecutive profitable quarters is an outstanding achievement in this industry and we could not do it without the great efforts and contributions of our Team Members. In 2012, we recorded the highest system fuel cost per gallon we have ever paid for a full year. In spite of that, we were able to grow full year earnings per share over 58 percent to the highest ever.”

Notable company quarterly highlights

Signed purchase agreements to acquire nine Airbus A320 aircraft previously operated by Iberia
Successfully converted 100 percent of our customer web traffic to our new booking engine in November

Returned over $38 million to shareholders through a special dividend of $2 per share in December
Repurchased approximately 55,000 shares for $4 million during the fourth quarter

As of January 30, 2013, we have converted 47 of an expected 51 MD-80s to 166 seat aircraft
Began operating 21 new routes during the quarter
Announced eight new routes starting in the first quarter
Ranked 14^th on the Forbes’ 100 Best Small Companies. We have been listed four years in a row

Revenue performance

Fourth quarter 2012 total average fare was up 4.4 percent versus 2011 and was the highest in the company’s history
12^th consecutive quarter of year over year increases in total average fare
Ancillary air-related revenue per passenger has grown sequentially every month since April 2012

	4Q12	4Q11	Change	2012	2011	Change
Scheduled Service:
Average fare – scheduled service	$88.59	$91.66	(3.3)%	$88.90	$89.15	(0.3)%
Average fare – ancillary air-related charges	$39.89	$31.51	26.6%	$35.72	$31.17	14.6%
Average fare – ancillary third party products	$5.19	$4.88	6.4%	$5.48	$5.18	5.8%
Average fare – total	$133.67	$128.05	4.4%	$130.10	$125.51	3.7%
Scheduled service passenger revenue per ASM (PRASM) (cents)	7.99	8.91	(10.3)%	8.43	8.88	(5.1)%
Total scheduled service revenue* per ASM (TRASM) (cents)	12.06	12.45	(3.1)%	12.33	12.50	(1.4)%
Load factor	86.5%	89.6%	(3.1)pp	89.4%	91.7%	(2.3)pp
Passengers (millions)	1.6	1.4	13.3%	6.6	5.8	14.1%
Average passengers per departure	141	134	5.2%	140	136	2.9%
Average scheduled service stage length (miles)	930	904	2.9%	918	901	1.9%

* Total scheduled service revenue includes scheduled service, ancillary air-related, and ancillary third party revenue.

Cost performance

Full year 2012 cost per ASM excluding fuel decreased 6.7 percent to 5.3 cents in spite of a five percent decrease in aircraft utilization for the same time period
Full year 2012 ASMs per gallon increased 6.6 percent to 63.0 versus last year, and improved sequentially 3.6 percent in the fourth quarter 2012 versus the third quarter 2012
Full year 2012 salaries and benefits expense per passenger decreased 1.7 percent despite a 14.2 percent increase in full time equivalent employees
Full year 2012 maintenance and repairs expense per passenger decreased 19.6 percent due primarily to a 60 percent decline in engine overhaul expenses. Maintenance expense per aircraft per month was $102,277 in 2012 versus $129,558 in 2011
Full year 2012 sales and marketing expense per passenger decreased 14.6 percent versus last year, primarily due to the implementation of a discount for customers paying with less expensive forms of payment beginning in the third quarter 2012

	4Q12	4Q11	Change	2012	2011	Change
Total System*:
Operating expense per passenger	$118.49	$116.08	2.1%	$111.12	$112.32	(1.1)%
Operating expense per passenger, excluding fuel	$63.50	$62.04	2.4%	$56.99	$58.78	(3.0)%
Operating expense per ASM (CASM) (cents)	10.50	11.03	(4.8)%	10.37	10.90	(4.9)%
Operating expense, excluding fuel per ASM (CASM ex fuel) (cents)	5.63	5.89	(4.4)%	5.32	5.70	(6.7)%
Average block hours per aircraft per day	5.3	5.6	(5.4)%	5.7	6.0	(5.0)%

* Total system includes scheduled service, fixed-fee contract and non-revenue flying.

Third party products performance

For the fourth quarter 2012, ancillary revenue – third party products per passenger increased 6.4 percent versus last year. This has been our eleventh consecutive quarter of year over year increases.
For the full year 2012, net revenue from hotels increased about five percent while net revenue from rental cars increased about 33 percent versus 2011

Supplemental Ancillary Revenue Information Unaudited (millions)	4Q12	4Q11	Change	2012	2011	Change
Gross ancillary revenue – third party products	$24.9	$23.0	8.6%	$119.0	$106.4	11.9%
Cost of goods sold	($16.2)	($15.2)	6.1%	($79.0)	($72.0)	9.7%
Transaction costs*	($.6)	($.9)	(35.9)%	($3.9)	($4.5)	(12.1)%
Ancillary revenue – third party products	$8.2	$6.8	20.5%	$36.1	$29.9	20.8%
As percent of gross	32.8%	29.6%	3.2pp	30.3%	28.1%	2.2pp
As percent of income before taxes	34.9%	36.9%	(2.0)pp	29.0%	37.6%	(8.6)pp
Ancillary revenue – third party products/scheduled passenger	$5.19	$4.88	6.4%	$5.48	$5.18	5.8%
Hotel room nights (thousands)	137.5	142.6	(3.5)%	690.1	647.7	6.5%
Rental car days (thousands)	169.1	113.8	48.6%	763.4	577.7	32.1%

* Includes payment expenses and travel agency commissions.

Balance sheet highlights

We currently have $41 million in share repurchase authority

Unaudited (millions)	12/31/12	12/31/11	Change
Unrestricted cash*	$352.7	$319.5	10.4%
Total debt	$150.9	$146.1	3.3%
Total Allegiant Travel Company stockholders’ equity	$400.5	$351.5	14.0%

Year ended December 31,
Unaudited (millions)	2012	2011	Change
Capital expenditures	$105.1	$86.6	21.4%

* Unrestricted cash includes investments in marketable securities.

At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision.

Guidance, subject to revision
Revenue guidance	January 2013	1Q13
Estimated PRASM year-over-year change	(13) to (11)%	(8) to (6)%

Fixed fee and other revenue guidance		1Q13
Fixed fee and other revenue (millions)		$4 to $6

Capacity guidance
System	1Q13	2Q13
Departure year-over-year growth	(8) to (4)%	(7) to (3)%
ASM year-over-year growth	+12 to 16%	+14 to 18%
Scheduled
Departure year-over-year growth	(2) to 2%	0 to 4%
ASM year-over-year growth	+15 to 19%	+19 to 23%

Cost guidance		1Q13
CASM ex fuel – year-over-year change		+1 to 3%

CAPEX guidance		FY13
Capital expenditures (millions)		$150 to $160

CASM ex fuel – cost per available seat mile excluding fuel expense

* Number of aircraft expected to be completed by end of the quarter

2013 aircraft fleet plan by end of quarter

Aircraft	1Q13	2Q13	3Q13	4Q13
MD-80 (166*)	51	51	51	51
MD-80 (non 166*)	6	5	1	1
757	6	6	6	6
A319	0	2	2	2
A320	0	0	2	7
Total	63	64	62	67

* 166 refers to MD-80s that are expected to be converted to 166 seat aircraft, non 166 refers to those aircraft that will not be converted

Aircraft listed in table above are considered in service aircraft

Copyright Photo: Ton Jochems. McDonnell Douglas DC-9-83 (MD-83) N416NV (msn 49555) is pictured arriving at the Las Vegas main hub.

Allegiant Air:

Allegiant cancels its deal with Cebu Pacific Air for 10 Airbus A319s

Allegiant Travel Company (Allegiant Air) (Las Vegas) today announced its proposed transaction to acquire ten Airbus A319 aircraft from Cebu Pacific Air has been terminated as a result of the parties’ failure to satisfy certain conditions to proceeding with the transaction. The potential transaction was made public on July 30, 2012 after the signing of the letter of intent.

“We are disappointed that we were not able to finalize this agreement on which we spent a substantial amount of time and effort,” said Andrew C. Levy, Allegiant President. “Unfortunately we were unable to come to terms on some of the economic provisions of the transaction and as we have demonstrated in the past, we will not purchase aircraft just for the sake of growth. Our disciplined approach in asset purchases is a core competency that we will not compromise.”

“We continue to have fleet flexibility in 2013 even without the Cebu A319s. Seven of the nine A320 aircraft, which we announced the intention to acquire on December 19, 2012, are expected to be delivered in 2013 and we now plan to introduce these aircraft into service at a faster pace so as to offset the capacity that had been planned with the Cebu A319s,” concluded Levy.

Allegiant is now expecting 2013 total CAPEX to be between $170 and $180 million. The company has signed operating leases for nine A319 aircraft with GECAS and purchase agreements for nine A320 aircraft formerly operated by Iberia. Allegiant will remain active in the market for the purchase or lease of additional Airbus aircraft.

Allegiant Air:

Allegiant Air to acquire up to nine former Iberia Airbus A320s

Allegiant Travel Company (Allegiant Air) (Las Vegas) has announced its intention to purchase up to nine used Airbus A320 aircraft. The average age of these aircraft at delivery is expected to be 12 years with a configuration of 177 seats. The aircraft have been most recently operated by Iberia.

“The A320 aircraft type is a perfect complement to the smaller A319 and will enable us to continue cost effective growth for years to come,” said Andrew C. Levy, Allegiant President. “These transactions represent a tremendous opportunity to purchase a sizeable fleet of sister-ships with CFM powered engines, the same engine type as our A319s, at very attractive prices. Finding up to nine aircraft of this pedigree available for purchase is unusual in our experience. Historically it has been difficult to find owners willing to sell quality assets at this point in their life cycle. Our cash reserves and strong balance sheet continue to provide us a unique ability in the used aircraft space to move on these attractive opportunities.”

“We do not expect a material change to our 2013 capacity as we will vary MD-80 utilization appropriately. As with the earlier acquisition of A319s, we are committed to only acquire aircraft at values that support our existing business model of relatively low fleet utilization,” concluded Levy.

Seven aircraft are expected to be purchased in 2013 and two in 2014. With the addition of this transaction, Allegiant is now expecting 2013 total CAPEX to be between $270 and $280 million versus the previous guidance of $150 to $160 million. The company expects to finance the purchase of these aircraft with debt. Allegiant expects to place the first A320 into service late in the third quarter of 2013 and all nine aircraft are expected to be in service by the end of 2014. No additional MD-80 retirements are planned as a result of this transaction.

As long as Allegiant Air can acquire second-hand Airbus aircraft it is unlikely to add any more older McDonnell Douglas MD-80s.

Copyright Photo: Keith Burton. The A320s will complement the smaller Airbus A319s being added to the fleet. Former easyJet Switzerland Airbus A319-111 HB-JZK (msn 2319) became N301NV with Allegiant.

Allegiant Air:

Allegiant Air adds new service from Punta Gorda, Las Vegas and Mesa

Allegiant Air (Las Vegas) is adding new routes from Punta Gorda, Florida with initial twice-weekly service to Plattsburgh, NY (February 23), Rockford, IL (February 14) and Toledo, OH (February 16) per Airline Route.

The company is also launching twice-weekly service from Las Vegas to Reno on February 1 followed by Mesa (near Phoenix) to Provo, UT on February 15 also per Airline Route.

Copyright Photo: Michael B. Ing. McDonnell Douglas DC-9-83 (MD-83) N892GA (msn 49826) climbs away from the runway at Los Angeles International Airport.

Route Map:

Allegiant 12:2012 Route Map

Allegiant Air:

Allegiant Air begins operational trial of FlyDesk Cabin iPad paperless system

Allegiant Air (Las Vegas), as well as three other international airlines, have begun operational trials of Allegiant Systems’ FlyDesk Cabin solution, which digitizes manuals, automates reporting and offers secure communication tools using Apple iPad® hardware. Using more than 200 iPads at the four airlines, FlyDesk Cabin creates a “paperless” operation, cutting back on unnecessary weight, facilitates accuracy of manuals and improves efficiency, while decreasing operational costs.

The four-week trial began on December 3 and will help define the operational benefits that mobile technology brings to the airlines’ cabin crew members. Crew members at each airline are using the advanced paperless workspace function of FlyDesk Cabin to improve customer service and productivity, while streamlining operational processes and increasing revenue opportunities.

The trial, which includes airlines in Europe and Central America , includes the advanced use of digital manuals and has demonstrated the multi-lingual capacity of the system. As part of the trial service, Allegiant Systems has also included training, hardware logistics and ongoing support services to the airlines.

In addition to the reporting and paperless functionality of FlyDesk Cabin, Allegiant Air also launched a new, integrated FlyDesk Buy-on-Board application, which allows the cabin crew to use the same iPad to process onboard customer purchases.

The initial hardware deployment and training has been completed successfully and thus far, the response from in-flight crews at all four airlines has been positive. The trial continues until the end of 2012, at which time the full results of the trials will be available.

According to the airline, FlyDesk Cabin is the first of several flyServices offered within the FlyDesk mobile platform by Allegiant Systems, all of which will offer increased efficiency for airlines, with faster deployment, effortless scaling and continuous support.

Allegiant Air:

The first Airbus A319 for Allegiant Air is painted, net income of $16.9 million in the 3Q

Allegiant Air‘s (Las Vegas) first Airbus A319 has been painted at Southend awaiting delivery.

In other news, the low-fare airline has cancelled all plans to operate Monterey-Honolulu service according to Airline Route.

On the financial side, the parent company issued the following statement for the third quarter:

Allegiant Travel Company has reported the following financial results for the third quarter 2012 as well as comparisons to prior year equivalents:

Unaudited	3Q12	3Q11	Change
Total operating revenue (millions)	$216.9	$191.5	13.2%
Operating income (millions)	$28.7	$16.7	71.8%
Operating margin	13.3%	8.7%	4.5pp
EBITDA (millions)	$44.6	$27.5	62.3%
EBITDA margin	20.6%	14.4%	6.2pp
Net income (millions)	$16.9	$9.5	78.6%
Diluted earnings per share	$0.87	$0.49	77.6%

“We are very proud to report our 39^th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “I`d like to thank our Team Members for their great efforts and contributions to another successful quarter. The third quarter is typically our weakest quarter of the year, and yet we were able to produce the highest third quarter earnings per share in the company`s history. This is particularly noteworthy to have done this in a quarter with the average oil price at $92 per barrel and in a demand environment that has been slightly weaker than historical norms.”

Notable company highlights

Entered into a lease agreement with GECAS for nine Airbus A319 aircraft on August 27
Announced intention to acquire ten Airbus A319 aircraft from Cebu Pacific Air on July 30
Announced service to Honolulu from Boise, Idaho, Phoenix and Spokane, Wash. to begin in early February 2013
Announced the formation of Allegiant Systems, a joint venture with AvIntel and Lixar IT to develop and market a wide variety of mobile technology services to the commercial aviation industry
As of October 23, we have converted 40 MD-80s to 166 seat aircraft
Announced fifteen routes, in addition to Hawaii, expected to begin in the fourth quarter of 2012

Revenue performance

Average fare – ancillary air-related revenue per passenger has grown to $37.05 in the third quarter 2012, a $4.66 increase since the first quarter 2012
September average fare – ancillary air-related revenue per passenger has grown to $38.08, a $5.48 increase since March 2012
11^th consecutive quarter of year over year increases in total average fare

	3Q12	3Q11	Change
Scheduled Service:
Average fare – scheduled service	$82.30	$84.94	(3.1)%
Average fare – ancillary air-related charges	$37.05	$30.38	22.0%
Average fare – ancillary third party products	$5.59	$5.31	5.3%
Average fare – total	$124.94	$120.63	3.6%
Scheduled service passenger revenue per ASM (PRASM) (cents)	7.89	8.58	(8.0)%
Total scheduled service revenue* per ASM (TRASM) (cents)	11.98	12.19	(1.7)%
Load factor	90.1%	92.2%	(2.1)pp
Passengers (millions)	1.6	1.5	9.4%
Average passengers per departure	143	136	5.1%

* Total scheduled service revenue includes scheduled service, ancillary air-related, and ancillary third party revenue.

Copyright Photo: Keith Burton. Formerly operated by easyJet (Switzerland), Airbus A319-111 HB-JZK (msn 2319) is the first A319 for Allegiant Air. It is pictured after painting at a Southend, near London. The airframe will become N301NV on delivery.

Hot New Photos:

Allegiant Air:

Allegiant Air to start Las Vegas-Plattsburgh flights on December 19

Allegiant Air (Las Vegas) will launch twice-weekly service between the Las Vegas hub and Plattsburgh, New York starting on December 19 per Airline Route.

Copyright Photo: Michael B. Ing. McDonnell Douglas DC-9-83 (MD-83) N405NV (msn 49623) decorated in the Blue Man Group climbs away from the runway at Los Angeles International Airport.

Allegiant Air:

Allegiant to start two new routes from Mesa, Arizona in December

Allegiant Air (Las Vegas) will start two new routes from Mesa, Arizona (west Phoenix) in December. Twice-weekly Mesa-Oakland service will be added on December 15 followed by twice-weekly Mesa-Casper, Wyoming service on December 20 per Airline Route.

Allegiant Air:

Allegiant finalizes its agreement with GECAS to lease 9 Airbus A319s from GECAS, the first is due in November

GE Capital Aviation Services (GECAS), the commercial aircraft leasing and financing arm of GE, announced today it has signed agreements to lease nine Airbus A319 aircraft to Allegiant Air (Las Vegas) to expand the carrier’s current fleet. All nine aircraft are powered with CFM56-5B engines.

The first aircraft is scheduled for delivery to Allegiant in November 2012, with the remaining scheduled for delivery through 2015.

Previously on July 30, 2012 Allegiant announced its intention to lease nine Airbus A319 aircraft from GE Capital Aviation Services (GECAS) and to lease and eventually purchase ten Airbus A319 aircraft from Cebu Pacific Air (Manila). This new signed contract moves up the delivery date of the first A319.

Image: Allegiant Air/Globe Newswire.

Allegiant Air:

St. Cloud, Minnesota to have airline service again via Allegiant Air

Allegiant Air (Las Vegas) has announced it will launch twice-weekly service from Mesa, Arizona (near Phoenix) to St. Cloud, MN on December 15. Delta dropped service to St. Cloud (to MSP) in December 2009.

Read the full report from MPR News: CLICK HERE

Copyright Photo: Bruce Drum. Allegiant also operates the McDonnell Douglas DC-9-87 (MD-87), mainly for charter flights. The short-fuselage type will be retired in 2013.

Allegiant Slide Show: