Allegiant Travel Company (Allegiant Air) today reported the following financial results for the second quarter 2021, as well as comparisons to the prior years:
| Consolidated |
Three Months Endedย June 30, |
|
Percent Change |
| (unaudited) (in millions, except per share amounts) |
2021 |
|
2020 |
|
2019 |
|
YoY |
|
Yo2Y |
| Total operating revenue |
$ |
472.4 |
|
|
$ |
133.3 |
|
|
$ |
491.8 |
|
|
254.3 |
|
|
(3.9) |
|
| Total operating expense |
333.6 |
|
|
246.6 |
|
|
383.7 |
|
|
35.3 |
|
|
(13.1) |
|
| Operating income (loss) |
138.9 |
|
|
(113.3) |
|
|
108.1 |
|
|
222.6 |
|
|
28.4 |
|
| Income (loss) before income taxes |
122.6 |
|
|
(146.4) |
|
|
91.8 |
|
|
183.7 |
|
|
33.5 |
|
| Net income (loss) |
95.0 |
|
|
(93.1) |
|
|
70.5 |
|
|
202.1 |
|
|
34.7 |
|
| Diluted earnings (loss) per share |
$ |
5.49 |
|
|
$ |
(5.85) |
|
|
$ |
4.33 |
|
|
193.8 |
|
|
26.8 |
|
|
|
Six Months Endedย June 30, |
|
Percent Change |
| (unaudited) (in millions, except per share amounts) |
2021 |
|
2020 |
|
2019 |
|
YoY |
|
Yo2Y |
| Total operating revenue |
$ |
751.6 |
|
|
$ |
542.5 |
|
|
$ |
943.4 |
|
|
38.5 |
|
|
(20.3) |
|
| Total operating expense |
588.1 |
|
|
766.8 |
|
|
744.2 |
|
|
(23.3) |
|
|
(21.0) |
|
| Operating income (loss) |
163.5 |
|
|
(224.3) |
|
|
199.2 |
|
|
172.9 |
|
|
(17.9) |
|
| Income (loss) before income taxes |
131.2 |
|
|
(277.1) |
|
|
165.7 |
|
|
147.4 |
|
|
(20.8) |
|
| Net income (loss) |
101.9 |
|
|
(126.1) |
|
|
127.7 |
|
|
180.8 |
|
|
(20.2) |
|
| Diluted earnings (loss) per share |
$ |
6.04 |
|
|
$ |
(7.93) |
|
|
$ |
7.84 |
|
|
176.2 |
|
|
(23.0) |
|
|
| Consolidated – adjusted |
Three Months Endedย June 30, |
|
Percent Change |
| (unaudited) (in millions, except per share amounts) |
2021 |
|
2020 |
|
2019 |
|
YoY |
|
Yo2Y |
| Adjusted operating expenseย (1) (2) |
$ |
378.6 |
|
|
$ |
239.9 |
|
|
$ |
383.7 |
|
|
57.8 |
|
|
(1.3) |
|
| Adjusted operating income (loss)ย (1) (2) |
93.9 |
|
|
(106.6) |
|
|
108.1 |
|
|
188.1 |
|
|
(13.1) |
|
| Adjusted income (loss) before income taxesย (1) (2) |
77.6 |
|
|
(119.9) |
|
|
91.8 |
|
|
164.7 |
|
|
(15.5) |
|
| Adjusted net income (loss)ย (1) (2) |
60.0 |
|
|
(94.7) |
|
|
70.5 |
|
|
163.4 |
|
|
(14.9) |
|
| Adjusted diluted earnings (loss) per shareย (1) (2) |
$ |
3.46 |
|
|
$ |
(5.96) |
|
|
$ |
4.33 |
|
|
158.1 |
|
|
(20.1) |
|
|
|
Six Months Endedย June 30, |
|
Percent Change |
| (unaudited) (in millions, except per share amounts) |
2021 |
|
2020 |
|
2019 |
|
YoY |
|
Yo2Y |
| Adjusted operating expenseย (1) (2) |
$ |
716.7 |
|
|
$ |
594.0 |
|
|
$ |
744.2 |
|
|
20.7 |
|
|
(3.7) |
|
| Adjusted operating income (loss)ย (1) (2) |
34.9 |
|
|
(51.5) |
|
|
199.2 |
|
|
167.8 |
|
|
(82.5) |
|
| Adjusted income (loss) before income taxesย (1) (2) |
2.6 |
|
|
(77.7) |
|
|
165.7 |
|
|
103.3 |
|
|
(98.4) |
|
| Adjusted net income (loss)ย (1) (2) |
2.0 |
|
|
(61.4) |
|
|
127.7 |
|
|
103.3 |
|
|
(98.4) |
|
| Adjusted diluted earnings (loss) per shareย (1) (2) |
$ |
0.12 |
|
|
$ |
(3.87) |
|
|
$ |
7.84 |
|
|
103.1 |
|
|
(98.5) |
|
|
| (1) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs (PSPs), and profit sharing bonus accruals since the operating margin threshold to accrue these bonuses would not have been met for the six months endedย June 30, 2021ย without the benefits of the PSPs |
| (2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information |
“The second quarter marked the return of leisure demand to pre-pandemic levels,” statedย Maurice J. Gallagher, Jr., chairman and CEO ofย Allegiant Travel Company. “Earnings per share came in atย $5.49ย 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 withย TRASM ofย 10.36 centsย (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 fuelย (3), ofย 5.86 cents, led to our adjusted operating margin(1)ย 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.ย 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 haveย $1.2 billionย of cash on hand, up 79 percent from a year ago. Our total net debt continues to improve at underย $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 withย Live Nationย 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
- GAAPย earnings per shareย ofย $5.49
- Adjusted earnings per share(1) (2) (3)ย ofย $3.46
- Consolidated EBITDA(2) (3)ย ofย $183.3 millionย yielding an EBITDA margin of 38.8 percent
- Adjusted EBITDA(1) (2) (3)ย ofย $138.3 millionย yielding an adjusted EBITDA margin of 29.3 percent
- Total June revenueย exceeded June of 2019
- Total operating revenueย wasย $472.4 million, up 69.3 percent from the first quarter and down 3.9 percent when compared to the second quarter of 2019
- Sustainedย yield strengthย throughout the quarter with yield up 7.8 percent year over two-year onย scheduled service capacityย increases of 4.5 percent
- Total average fareย ofย $126.82, up 10.8 percent year over two-year
- Total ancillary average fareย $64.25, up 14.6 percent from 2019 driven primarily by bundled air ancillary offerings, rental car rate strength, and increased cobrand activity
- TRASMย ofย 10.36 cents, down 5.6 percent year over two-year, and up 50.3 percent from the first quarter 2021
- Load factorย of 70.8%, up nearly 16 percentage points from the first quarter
- Record-breaking quarter forย co-brand activityย 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)ย ofย $378.6 million, down 1.3 percent from second quarter 2019 on total system capacity increase of 3.3 percent
- Adjusted Operating CASM, excluding fuelย (3)ย ofย 5.86 cents, flat when compared to the second quarter of 2019
- Adjusted operating margin(1)ย of 19.9 percent
- Expanded the networkย by adding 29 new routes with four new cities and complementary service inย Phoenixย with the addition ofย Phoenix Sky Harbor International Airport, bringing total routes served to 596 and 134 cities
- Ranked number two among US airlines within the 2021ย 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 endedย June 30, 2021ย 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
- Totalย cash and investmentsย atย June 30, 2021ย wereย $1.2 billion, up fromย $728 millionย atย March 31, 2021
- Cash from operationsย ofย $237 million, including the benefit from the payroll support program and federal income tax refund ofย $12 millionย related to prior period tax net operating losses
- Adjusted cash from operations ofย $176 million, which excludes theย $49.2 millionย net benefit from the PSPs, andย $12 millionย federal tax refund
- Debtย principal paymentsย ofย $48 millionย during the quarter
- Includes prepayment of debt secured by five aircraft
- $65 millionย used for cashย capital expenditures
- Raisedย $335 millionย fromย issuance of 1.6 million sharesย at a price ofย $219ย per share during the second quarter
- Second quarterย interest expenseย ofย $17 million, down 20 percent year over two-year
- Expect to receiveย $136 millionย in federal tax refundsย during the second half of the year related to 2020 net operating losses
- Air traffic liabilityย atย June 30, 2021ย wasย $437 million
- Balance related to future scheduled flights isย $305 million
- Balance related to travel vouchers issued for future use isย $132 million, a 26 percent reduction fromย March 31, 2021
Capital Expenditures
- Second quarter capital expendituresย related to aircraft, engines and induction costs wereย $46 millionย andย $19 millionย in other airline capital expenditures
- Second quarter capital expenditures related toย deferred heavy maintenanceย wereย $23 million
- Executed agreements to acquire 21 incremental aircraft year-to-date
| Guidance, subject to revision |
Previous |
Current |
|
|
|
| Third Quarter 2021 guidance |
|
|
|
|
|
|
|
| System ASMs – year over two-year change(1) |
|
|
16.0 to 20.0% |
| Scheduled Serviceย ASMs – year over two-year change(1) |
|
|
16.0 to 20.0% |
|
|
|
|
| Total operating revenue – year over two-year changeย (1) |
|
|
Up 3.5% to 7.5% |
|
|
|
|
| Fuel cost per gallon |
|
|
$ |
2.11 |
|
|
|
|
| Full year 2021 guidance |
|
|
|
|
|
|
|
| CAPEX |
|
|
|
| Aircraft, engines and induction costs (millions) |
|
$115ย toย $125 |
$115ย toย $125 |
| Capitalized Airbus deferred heavy maintenance (millions) |
|
$50ย toย $60 |
$50ย toย $60 |
| Other capital expenditures (millions) |
|
$40ย toย $50 |
$40ย toย $50 |
|
|
|
|
| Interest expense |
|
$65ย toย $70 |
$65ย toย $70 |
| Recurring principal payments(2) |
|
$170ย toย $180 |
$170ย toย $180 |
|
| (1) Year over two-year percentage changes compare 2021 to 2019 |
| (2) Excludesย $111 millionย of principal repayments related to the maturity of our revolving credit facility and the refinancing of three A320 aircraft during the first quarter 2021 |
Aircraft Fleet Plan by End of Period
| Aircraft – (seats per AC) |
2Q21 |
3Q21 |
YE21 |
| A319 (156 seats) |
35 |
|
35 |
|
35 |
|
| A320 (177 seats) |
23 |
|
23 |
|
22 |
|
| A320 (186 seats) |
45 |
|
49 |
|
51 |
|
| Total |
103 |
|
107 |
|
108 |
|
|
| The table above is provided based on the company’s current plans and is subject to change |
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