Category Archives: Allegiant Travel Company

Allegiant reports its fourth quarter will be its third consecutive quarter of profitability since the onset of the pandemic

Allegiant Travel Company (Allegiant Air) today reported preliminary passenger traffic results for December 2021, fourth quarter 2021, and full year 2021.

“Fourth quarter scheduled capacity was up 14.5 percent as compared with 2019, in line with our initial expectations,” stated Drew Wells, senior vice president of revenue. “Despite a challenging operating environment during the Christmas holiday peak-period, we ended the quarter with a load factor of 78.8 percent, the highest since the onset of the pandemic. Although Omicron led to an uptick in customer cancellations, daily booking trends throughout the quarter consistently outperformed levels observed in 2019. This strength in bookings resulted in total operating revenue of roughly $496 million for the quarter, an increase of more than 7.5 percent when compared with 2019.”

“We are pleased to report that the fourth quarter will be our third consecutive quarter of profitability since the onset of the pandemic,” stated Gregory Anderson, executive vice president and chief financial officer. “Despite operational challenges around holiday peak travel, we expect an adjusted1 EBITDA margin for the fourth quarter of roughly 19 percent. This margin includes nearly $23 million of irregular operations costs incurred during the quarter, the majority of which were incurred in December. Operational challenges were predominantly a result of crew shortages related to Omicron. Although these challenges continued into early January, we are beginning to see relief and expect significant improvement in the operation as the Omicron variant begins to dissipate.”

Scheduled Service – Year Over Two-Year Comparison
December 2021 December 2019 Change
Passengers 1,320,403 1,308,341 0.9%
Revenue passenger miles (000) 1,226,131 1,165,902 5.2%
Available seat miles (000) 1,556,101 1,411,107 10.3%
Load factor 78.8% 82.6% (3.8 pts)
Departures 9,801 9,423 4.0%
Average stage length (miles) 902 871 3.6%
4th Quarter 2021 4th Quarter 2019 Change
Passengers 3,671,032 3,516,263 4.4%
Revenue passenger miles (000) 3,306,563 3,073,055 7.6%
Available seat miles (000) 4,288,133 3,745,031 14.5%
Load factor 77.1% 82.1% (5.0pts)
Departures 27,818 25,541 8.9%
Average stage length (miles) 876 856 2.3%
YTD 2021 YTD 2019 Change
Passengers 13,509,544 14,823,267 (8.9%)
Revenue passenger miles (000) 11,963,715 13,038,003 (8.2%)
Available seat miles (000) 17,027,902 15,545,818 9.5%
Load factor 70.3% 83.9% (13.6pts)
Departures 113,121 105,690 7.0%
Average stage length (miles) 862 859 0.3%

Total System* – Year Over Two-Year Comparison
December 2021 December 2019 Change
Passengers 1,327,884 1,318,872 0.7%
Available seat miles (000) 1,586,060 1,453,592 9.1%
Departures 10,065 9,742 3.3%
Average stage length (miles) 896 868 3.2%
4th Quarter 2021 4th Quarter 2019 Change
Passengers 3,731,034 3,585,966 4.0%
Available seat miles (000) 4,440,839 3,928,536 13.0%
Departures 29,193 27,088 7.8%
Average stage length (miles) 865 846 2.2%
YTD 2021 YTD 2019 Change
Passengers 13,637,405 15,012,149 (9.2%)
Available seat miles (000) 17,490,571 16,174,240 8.1%
Departures 117,047 110,542 5.9%
Average stage length (miles) 856 855 0.1%

 

Scheduled Service – Year Over Year Comparison
December 2021 December 2020 Change
Passengers 1,320,403 673,041 96.2%
Revenue passenger miles (000) 1,226,131 611,429 100.5%
Available seat miles (000) 1,556,101 1,128,200 37.9%
Load factor 78.8% 54.2% 24.6pts
Departures 9,801 7,281 34.6%
Average stage length (miles) 902 891 1.2%
4th Quarter 2021 4th Quarter 2020 Change
Passengers 3,671,032 2,129,292 72.4%
Revenue passenger miles (000) 3,306,563 1,878,831 76.0%
Available seat miles (000) 4,288,133 3,226,050 32.9%
Load factor 77.1% 58.2% 18.9pts
Departures 27,818 21,399 30.0%
Average stage length (miles) 876 868 0.9%
YTD 2021 YTD 2020 Change
Passengers 13,509,544 8,553,623 57.9%
Revenue passenger miles (000) 11,963,715 7,626,470 56.9%
Available seat miles (000) 17,027,902 12,814,080 32.9%
Load factor 70.3% 59.5% 10.8pts
Departures 113,121 85,276 32.7%
Average stage length (miles) 862 867 (0.6%)

 

Total System* – Year Over Year Comparison
December 2021 December 2020 Change
Passengers 1,327,884 679,424 95.4%
Available seat miles (000) 1,586,060 1,147,534 38.2%
Departures 10,065 7,471 34.7%
Average stage length (miles) 896 883 1.5%
4th Quarter 2021 4th Quarter 2020 Change
Passengers 3,731,034 2,159,035 72.8%
Available seat miles (000) 4,440,839 3,315,599 33.9%
Departures 29,193 22,189 31.6%
Average stage length (miles) 865 860 0.6%
YTD 2021 YTD 2020 Change
Passengers 13,637,405 8,623,984 58.1%
Available seat miles (000) 17,490,571 13,125,533 33.3%
Departures 117,047 87,955 33.1%
Average stage length (miles) 856 862 (0.7%)

 

*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
December 2021 estimated average fuel cost per gallon – system $2.37
$ per gallon
4th quarter 2021 estimated average fuel cost per gallon – system $2.48
$ per gallon
Full year 2021 estimated average fuel cost per gallon – system $2.15

Allegiant reports a net profit of $66.3 million in the third quarter, new routes from Akron/Canton

Allegiant Travel Company today reported the following financial results for the third quarter 2021, as well as comparisons to the prior years:

Consolidated Three Months Ended September 30, Percent Change
(unaudited) (in millions, except per share amounts) 2021 2020 2019 YoY Yo2Y
Total operating revenue $ 459.5 $ 201.0 $ 436.5 128.6 % 5.3 %
Total operating expense 393.2 234.1 364.4 68.0 7.9
Operating income (loss) 66.3 (33.1) 72.1 300.4 (8.1)
Income (loss) before income taxes 50.2 (44.7) 56.9 212.4 (11.7)
Net income (loss) 39.3 (29.1) 43.9 234.7 (10.6)
Diluted earnings (loss) per share $ 2.18 $ (1.82) $ 2.70 219.8 (19.3)

 

Nine Months Ended September 30, Percent Change
(unaudited) (in millions, except per share amounts) 2021 2020 2019 YoY Yo2Y
Total operating revenue $ 1,211.0 $ 743.5 $ 1,379.9 62.9 % (12.2) %
Total operating expense 981.3 1,000.8 1,108.6 (2.0) (11.5)
Operating income (loss) 229.7 (257.3) 271.3 189.3 (15.3)
Income (loss) before income taxes 181.5 (321.9) 222.6 156.4 (18.5)
Net income (loss) 141.2 (155.3) 171.6 190.9 (17.7)
Diluted earnings (loss) per share $ 8.18 $ (9.75) $ 10.54 183.9 (22.4)

 

Consolidated – adjusted Three Months Ended September 30, Percent Change
(unaudited) (in millions, except per share amounts) 2021 2020 2019 YoY Yo2Y
Adjusted operating expense (1) (2) $ 428.0 $ 278.4 $ 364.4 53.7 % 17.5 %
Adjusted operating income (loss) (1) (2) 31.5 (77.4) 72.1 140.7 (56.3)
Adjusted income (loss) before income taxes (1) (2) 15.4 (89.0) 56.9 117.3 (72.9)
Adjusted net income (loss) (1) (2) 11.9 (68.5) 43.9 117.4 (72.9)
Adjusted diluted earnings (loss) per share (1) (2) $ 0.66 $ (4.28) $ 2.70 115.4 (75.6)

 

Nine Months Ended September 30, Percent Change
(unaudited) (in millions, except per share amounts) 2021 2020 2019 YoY Yo2Y
Adjusted operating expense (1) (2) $ 1,144.7 $ 872.3 $ 1,108.6 31.2 % 3.3 %
Adjusted operating income (loss) (1) (2) 66.3 (128.8) 271.3 151.5 (75.6)
Adjusted income (loss) before income taxes (1) (2) 18.1 (166.8) 222.6 110.9 (91.9)
Adjusted net income (loss) (1) (2) 14.0 (128.4) 171.6 110.9 (91.8)
Adjusted diluted earnings (loss) per share (1) (2) $ 0.82 $ (8.07) $ 10.54 110.2 (92.2)
(1) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs (PSPs), and bonus accruals
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information

We finished the quarter with earnings per share of $2.18, our second consecutive quarter of profitability since the onset of the pandemic,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “Third quarter total operating revenue was up 5.3 percent year over two-year making us one of the only domestic carriers to grow revenue from pre-pandemic levels. While demand was strong during our peak summer travel period, we experienced a slowdown as the delta variant spiked, but have since seen the demand curve ramp back up. Yields held up nicely, considering the effects of the delta variant, down less than six percent on scheduled service capacity increases of 17 percent. Third-party revenue continues to outperform, up 32.0 percent on a per passenger basis compared with 2019.

“Despite the favorable revenue environment, the operation continues to present challenges, as noted by several of our peers as well. Prior to COVID, the operation was a well-oiled machine – things ran smoothly. Fast forward to today, and we are operating in a different environment. The over-heated economy, continuing impacts of COVID, plus difficult labor environment created a perfect storm of challenges, including cancellations and delays over the past several months. We have a strong compensation approach for our interrupted passengers. We reimburse our customers for the inconvenience we have caused via prepaid credit cards or ACH deposits. Given the volume of our interruptions this past quarter, this was a meaningful amount. As a result, our third quarter adjusted CASM, excluding fuel, was 6.97 cents, 4.3 percent higher year over two-year. Excluding these costs for irregular operations, I was pleased that our adjusted CASM, excluding fuel was below the third quarter of 2019. As we head into the holiday season, job one is managing our operational integrity. We’ve scaled back on some peak day travel to mitigate the risk of cancellations. We now expect fourth quarter capacity to be up 12 percent from 2019.

“In regards to 2022 growth plans, it’s too early to provide specific numbers. At a minimum, growth will mirror our historical low, double-digit rate. However, if fuel continues to increase, we will moderate capacity accordingly. Uncertainty around the labor market is another growth factor we are watching. In the coming months, we will closely monitor the operational environment and our personnel availability. The flexibility of our model will continue to be vital as we respond to these differing environmental factors. We will have more insights at our next call.

“Although we have faced recent operational challenges, the business is in great shape. The balance sheet is stronger than ever with total liquidity of $1.1 billion and net debt of roughly $500 million. We’ve proven the resiliency of the model in both good times and bad, including high fuel cost environments. I am optimistic about the future. Our runway of potential routes continues to exceed 1,000. We’ve identified untapped revenue potential within third-party sales and are pleased to see positive trends from our newly launched loyalty program, Allways Rewards – both will contribute bottom line results in the coming years. Additionally, we resumed construction on Sunseeker Resorts with an anticipated opening date during the first quarter of 2023 as well as closed on $350 million of construction financing. We are excited to see this project come to fruition.

“The last several months have been challenging for our team members. The operational environment has created added stress, yet they have continued to work hard, putting our customers’ needs and safety first. I cannot thank them enough for their efforts. Relief is on the horizon as we are aggressively hiring more frontline employees. The future for Allegiant is very bright. We would not be in the favorable position we find ourselves in today without our team members’ hard work and dedication.”

Third Quarter 2021 Results

  • GAAP diluted earnings per share of $2.18
    • Adjusted diluted earnings per share(1) (2) (3) of $0.66
  • Consolidated EBITDA(2) (3) of $112.5 million yielding an EBITDA margin of 24.5 percent
    • Adjusted EBITDA(1) (2) (3) of $77.7 million yielding an adjusted EBITDA margin of 16.9 percent
  • Total operating revenue was $459.5 million, up 5.3 percent when compared with the third quarter of 2019
    • One of the first domestic carriers to achieve year over two-year revenue increases since the onset of the pandemic
    • Yield remained strong throughout the quarter down only 5.9 percent year over two-year on scheduled service capacity increases of 17.0 percent
  • Total average fare of $116.91, up 7.2 percent year over two-year
    • Total ancillary average fare of $64.85, up 18.2 percent from 2019 driven primarily by air ancillary bundles, website redesign, rental car rate strength, and increased cobrand activity
  • Continued sequential improvement in load factor, which came in at 76.6 percent, up 6 percentage points from the second quarter
    • Third quarter peak period load factor exceeded 80 percent
    • TRASM of 10.40 cents, down 6.3 percent year over two-year on scheduled service capacity increases of 17.0 percent
  • Adjusted operating CASM, excluding fuel of 6.97 cents, up 4.3 percent when compared with the third quarter of 2019, driven primarily by costs related to increased irregular operations

Third Quarter 2021 Highlights

  • Expanded the network by adding 25 new routes with one new city, Minneapolis-St. Paul, and two new bases, Appleton and Flint, bringing total routes served to 598 and 132 cities
    • List of potential incremental routes to add to the network continues to exceed 1,000
  • Allegiant World Mastercard voted USA Today Readers’ Choice Best Airline Co-Branded Credit Card for the third consecutive year
    • Full-year 2021 total revenue related to the cobrand program on track to outpace 2019
    • Two months during the third quarter ranked in the top five highest cardholder acquisition months since the inception of the program in 2016
    • Completed the quarter with nearly 275 thousand active cardholders, up 49 percent from the third quarter of 2019
    • Average annual spend for cardholders is more than twice that of non-cardholders
  • Launched the Allways Rewards program during the quarter with over 13 million active members
  • Partnered with Women In Aviation Las Vegas to sponsor Girls in Aviation Day at McCarran International Airport
  • Resumed providing in-kind travel for Make-A-Wish kids and their families during the third quarter

(1) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs, and bonus accruals
(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

  • Total cash and investments at September 30, 2021 were $1.1 billion
  • Received $21 million federal tax refund related to 2020 net operating losses
    • Received $116 million in federal tax refunds in October related to 2020 net operating losses
  • Debt principal payments of $40 million during the quarter
  • $40 million used for cash capital expenditures
  • Third quarter interest expense of $17 million, down 15 percent year over two-year
  • Air traffic liability at September 30, 2021 was $352 million
    • Balance related to future scheduled flights is $246 million
    • Balance related to travel vouchers issued for future use is $106 million, a 19 percent reduction from June 30, 2021

Capital Expenditures

  • Third quarter capital expenditures related to aircraft, engines and induction costs were $9 million and $18 million in other airline capital expenditures
    • $9 million related primarily to aircraft induction costs
  • Third quarter expenditures related to deferred heavy maintenance were $15 million

Sunseeker Resort

  • Resumed construction with an anticipated completion date of the first quarter of 2023
  • Secured financing with Castlelake, L.P. to fund up to $350 million of construction with $175 million expected to be drawn by the end of October
  • Third quarter capital expenditures related to the project were $13 million

 

Guidance, subject to revision Previous Current
Fourth Quarter 2021 guidance
System ASMs – year over two-year change(1) 10.0 to 14.0%
Scheduled Service  ASMs – year over two-year change(1) 12.0 to 16.0%
Total operating revenue – year over two-year change (1)  0.5% to 4.0%
Fuel cost per gallon 2.55
Full year 2021 guidance
Airline CAPEX
Aircraft, engines and induction costs (millions) $115 to $125 $115 to $125
Capitalized deferred heavy maintenance (millions) $50 to $60 $50 to $60
Other airline capital expenditures (millions) $40 to $50 $60 to $70
Sunseeker Resorts Project 
2021 project spend (millions) $50 to $55
Interest expense $65 to $70 $65 to $70
Recurring principal payments(2) $170 to $180 $170 to $180
(1) Year over two-year percentage changes compare 2021 to 2019
(2) Excludes $111 million 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) 1Q21 2Q21 3Q21 YE21
A319 (156 seats) 35 35 35 35
A320 (177 seats) 26 23 23 22
A320 (186 seats) 39 45 48 51
Total 100 103 106 108

The table above is provided based on the company’s current plans and is subject to change

In other news, the airline announced new routes from Akron/Canton:

Allegiant Announces Vote To Ratify Maintenace Technicians Contract With International Brotherhood Of Teamsters

Allegiant Air today announced that maintenance technician and related employees represented by the International Brotherhood of Teamsters (IBT) have voted to ratify their first collective bargaining agreement with the company.

The contract is effective from the date of ratification – October 26, 2021 – for a five-year term.  Allegiant currently employs 415 maintenance technician and related employees – a group which includes line and heavy maintenance technicians, as well as stores employees and some administrative maintenance staff.

The process of negotiating a first collective bargaining agreement for Allegiant maintenance technician and related employees began in January 2019. The parties had temporarily suspended negotiations due to the onset of the COVID-19 pandemic, and talks resumed in September 2020. The International Brotherhood of Teamsters was most recently certified as the group’s exclusive representative on March 7, 2018.

Allegiant’s July 2021 traffic exceeds July 2019 traffic by 6.4%

Allegiant Air Airbus A319-111 N319NV (msn 2503) LAS (Gunter Mayer). Image: 954241.

Allegiant Travel Company (Allegiant Air) today reported preliminary passenger traffic results for July 2021. Its traffic is now about 2019 results, before the pandemic impacted travel.

Scheduled Service – Year Over Two-Year Comparison

July 2021 July 2019 Change
Passengers 1,852,193 1,740,997 6.4%
Revenue passenger miles (000) 1,591,306 1,483,724 7.3%
Available seat miles (000) 1,957,736 1,682,024 16.4%
Load factor 81.3% 88.2% (6.9pts)
Departures 13,428 11,832 13.5%
Average stage length (miles) 834 834 0.0%

Total System* – Year Over Two-Year Comparison

July 2021 July 2019 Change
Passengers 1,857,678 1,750,065 6.1%
Available seat miles (000) 1,982,157 1,725,577 14.9%
Departures 13,634 12,165 12.1%
Average stage length (miles) 832 833 (0.1%)

Scheduled Service – Year Over Year Comparison

July 2021 July 2020 Change
Passengers 1,852,193 894,679 107.0%
Revenue passenger miles (000) 1,591,306 768,714 107.0%
Available seat miles (000) 1,957,736 1,516,821 29.1%
Load factor 81.3% 50.7% 30.6pts
Departures 13,428 10,370 29.5%
Average stage length (miles) 834 843 (1.1%)

Total System* – Year Over Year Comparison

July 2021 July 2020 Change
Passengers 1,857,678 896,478 107.2%
Available seat miles (000) 1,982,157 1,533,852 29.2%
Departures 13,634 10,559 29.1%
Average stage length (miles) 832 838 (0.7%)

*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
July 2021 estimated average fuel cost per gallon – system $2.19

Top Copyright Photo: Allegiant Air Airbus A319-111 N319NV (msn 2503) LAS (Gunter Mayer). Image: 954241.

Allegiant Air aircraft slide show:

ALC leases ten used Airbus A320s to Allegiant Air

Air Lease Corporation (ALC) announced on July 28 long-term lease placements for ten used Airbus A320-200 aircraft with Allegiant.

The aircraft are scheduled to be delivered to the airline beginning in the Fall 2021 through Summer 2022.

Allegiant sees a leisure travel demand recovery for May and into this month

Allegiant Travel Company has reported preliminary passenger traffic results for May 2021. 

“We have been pleased to see leisure demand recovery persist throughout May and into early June,” stated Drew Wells, senior vice president, revenue. “Average daily bookings since the beginning of March have continued to exceed 2019 levels. May saw a nearly five-point increase in load factor when compared with April, and peak Memorial Day travel days saw load factors of roughly 80 percent. We anticipate June loads will be in excess of 75 percent on year-over-two-year capacity increases of roughly 15 percent. We continue to expect second quarter scheduled service revenue, excluding fixed fee and other revenue, to be down six to ten percent when compared with the second quarter of 2019.”

Scheduled Service – Year Over Two-Year Comparison
May 2021 May 2019 Change
Passengers 1,040,590 1,269,429 (18.0%)
Revenue passenger miles (000) 888,735 1,093,781 (18.7%)
Available seat miles (000) 1,293,704 1,308,911 (1.2%)
Load factor 68.7% 83.6% (14.9pts)
Departures 8,939 9,086 (1.6%)
Average stage length (miles) 834 843 (1.1%)

Total System* – Year Over Two-Year Comparison
May 2021 May 2019 Change
Passengers 1,046,813 1,281,742 (18.3%)
Available seat miles (000) 1,326,062 1,357,963 (2.3%)
Departures 9,202 9,416 (2.3%)
Average stage length (miles) 831 844 (1.5%)

 

Scheduled Service – Year Over Year Comparison
May 2021 May 2020 Change
Passengers 1,040,590 362,528 187.0%
Revenue passenger miles (000) 888,735 326,748 172.0%
Available seat miles (000) 1,293,704 690,624 87.3%
Load factor 68.7% 47.3% 21.4pts
Departures 8,939 4,654 92.1%
Average stage length (miles) 834 856 (2.6%)

 

Total System* – Year Over Year Comparison
May 2021 May 2020 Change
Passengers 1,046,813 365,519 186.4%
Available seat miles (000) 1,326,062 710,712 86.6%
Departures 9,202 4,795 91.9%
Average stage length (miles) 831 855 (2.8%)

*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
May 2021 estimated average fuel cost per gallon – system $2.02

Allegiant Air aircraft slide show:

Allegiant loses $57.9 million in the first quarter

Allegiant Air Airbus A319-111 N319NV (msn 2503) LAX (Michael B. Ing). Image: 948907.

Allegiant Travel Company (Allegiant Air) today reported the following financial results for the first quarter 2021, as well as comparisons to the prior years:

Consolidated Three Months Ended March 31, Percent Change
(unaudited) (in millions, except per share amounts) 2021 2020 2019 YoY Yo2Y
Total operating revenue $ 279.1 $ 409.2 $ 451.6 (31.8) (38.2)
Total operating expense 254.5 527.0 360.5 (51.7) (29.4)
Operating income (loss) 24.6 (117.8) 91.1 120.9 (73.0)
Income (loss) before income taxes 8.7 (130.7) 73.9 106.6 (88.3)
Net income (loss) 6.9 (33.0) 57.1 120.8 (88.0)
Diluted earnings (loss) per share $ 0.42 $ (2.08) $ 3.52 120.2 (88.1)
Consolidated – adjusted Three Months Ended March 31, Percent Change
(unaudited) (in millions, except per share amounts) 2021 2020 2019 YoY Yo2Y
Adjusted operating income (loss) (1) (2) $ (59.0) $ 55.1 $ 91.1 (207.1) (164.8)
Adjusted operating expense (1) (2) 338.1 360.9 360.5 (6.3) (6.2)
Adjusted income (loss) before income taxes (1) (2) (74.9) 42.2 73.9 (277.5) (201.4)
Adjusted net income (loss) (1) (2) (57.9) 32.5 57.1 (278.2) (201.4)
Adjusted diluted earnings (loss) per share (1) (2) $ (3.58) $ 2.05 $ 3.52 (274.6) (201.7)
(1) Adjusted excludes COVID related special charges and the net benefit from the Payroll Support Program Extension Agreement (the “PSP2”)
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information

 

“The momentum reported last quarter picked up in earnest towards the back half of the first quarter with booking trends showing meaningful improvement,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “We completed the quarter with earnings per share of $0.42 on year over two-year revenue declines of 38.2 percent, continuing the trend of sequential revenue improvement. We were the first domestic carrier to restore capacity to pre-pandemic levels, with first quarter scheduled capacity up 3.1 percent as compared to 2019. Booking trends have been particularly impressive with average daily bookings for the months of March and April exceeding the same time period in 2019. Furthermore, the booking curve appears to be normalizing and more closely resembling what we saw in 2019. April’s results came in as strong as March helped by a ten-point increase in load factor from 54 to 64 percent. We expect capacity in the coming months will be equal to or greater than our 2019 levels.

“During the past year, in the face of this terrible pandemic, we were focused on improving ourselves. I believe we have done that. We have improved our cost structure substantially. Our balance sheet is in excellent shape. As of March 31, our net debt has decreased. Our cash balances have increased, and by the end of the second quarter we expect to have total liquidity of $1 billion, or more than double our year-end 2019 balance. We were able to double our cash balances without an equity raise or substantial increases in debt. We benefited from the payroll support programs as well as federal income tax refunds of the substantial tax payments made in the past years. Our shareholders have seen their company’s balance sheet improve dramatically – perhaps more than any other company in this space – in spite of the setbacks and hardships imposed by this unprecedented event.

“I could not be more bullish on our outlook. Going forward our full-year, 2021 capacity should exceed 2019 capacity levels. We expect sequential scheduled service revenue improvement with revenue down just six to ten percent as compared with 2019 levels. This revenue growth should continue through the remainder of 2021. We continue to separate ourselves from the competition, operating more capacity and generating positive EBITDA and earnings. I believe now more than ever our low-cost, low-utilization model designed to provide affordable leisure travel is our competitive advantage, which will help drive us towards returning to our goal of $6 million in EBITDA per aircraft.

“We would not be in the favorable position we are today without the continued efforts of the 4,000 employees throughout our network. Their hard work has been integral to successfully navigating the most difficult year in the industry’s history. It is their efforts that have enabled us to effectively manage capacity while cutting costs from the business – both critical components to ensuring a sustained return to profitability.”

First Quarter 2021 Results

  • GAAP earnings per share of $0.42
    • Adjusted loss per share(1) (2) of $3.58, adjusted numbers exclude the impact from PSP2 and $1.7 million of COVID related special charges
  • Consolidated EBITDA(2) of $68.2 million yielding an EBITDA margin of 24.4 percent
    • Adjusted EBITDA(1) (2) of $(15.4) million
  • Restored capacity to pre-pandemic levels with scheduled service capacity up 3.1 percent versus first quarter of 2019
  • Total revenue for the quarter was $279.1 million, up 13.2 percent from the fourth quarter
    • Includes fixed fee revenue of $7.7 million, the strongest quarter since the onset of the pandemic
    • Total average fare was $116.35, down 8.9 percent as compared to 2019, with third party product average fare of $5.86, up 17.0 percent year over two-year
  • Adjusted operating expense(1) (2) of $338.1 million, down 6.3 percent from first quarter 2019 on total system capacity increase of 2.7 percent
    • Adjusted Operating CASM, excluding fuel(1)(2) of 6.36 cents, down 4.6 percent from first quarter of 2019
  • Announced the addition of a new base in Austin, Texas, beginning base operations in November 2021, which is expected to create 89 high-wage jobs and house three A320 aircraft
  • Expanded the network by adding 50 new routes, three new cities, and nine event-specific routes, bringing total routes served to 580 and 129 cities
  • Included on Forbes’ list of America’s Best Employers for Diversity in 2021
  • Partnered with The Smith Center for the Performing Arts as a sponsor of the annual Heart of Education Awards honoring outstanding teachers in Southern Nevada by awarding travel vouchers to more than 700 teachers

(1) Adjusted excludes COVID related special charges and the net benefit from the Payroll Support Program Extension Agreement (the “PSP2”)
(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 March 31, 2021 were $728 million, up from $685 million at December 31, 2020
    • Cash from operations of $168 million including the benefit from the payroll support program
      • Adjusted cash from operations of $68.2 million, which excludes the $91.8 million benefit from the PSP2 as well as excludes $8 million related to restricted cash balances
    • Received $105 million in debt proceeds
      • Net proceeds received of $50.2 million due to refinance of three A320 aircraft
    • Debt principal payments of $152 million during the quarter
      • Includes repayment of existing debt on three aircraft as well as repayment of existing revolver as the facility matured during the first quarter
      • Entered into a new secured revolving credit facility with a $50 million commitment, which is currently undrawn
    • $69 million used for cash capital expenditures during the first quarter with $13 million related to 2020 accrued capital expenditures
  • First quarter interest expense of $16.8 million, down 7.5 percent from first quarter in the prior year
      • Increased full year interest expense guide driven primarily by A320 refinance arrangement and an increase in LIBOR
  • Second quarter sources of liquidity expected to be received are $260.9 million
    • $112.2 million from the U.S. Treasury of which $13.8 million is related to the PSP2 and $98.4 million is related to Payroll Support Program 3 Agreement (the “PSP3”)
      • Additional PSP2 funds triggered a $1.7 million loan and issuance of 924 warrants at a strike price of $179.23
    • $148.7 million in tax refunds related to net operating losses
  • Air traffic liability at March 31, 2021 was $403 million, compared to $308 million at December 31, 2020
    • Balance related to future scheduled flights is $224 million, up from $86 million on December 31, 2020
    • Balance related to travel vouchers issued for future use is $179 million, a 19 percent reduction from December 31, 2020

Capital Expenditures

  • First quarter capital expenditures related to aircraft, engines and induction costs were $56 million, which included $50 million for the acquisition of three aircraft and induction costs, and $6 million in other airline capital expenditures
  • First quarter capital expenditures related to deferred heavy maintenance were $8.5 million

 

Guidance, subject to revision Previous Current
Second Quarter 2021 guidance
System ASMs – year over two-year change(1) 2.0 to 6.0%
Scheduled Service  ASMs – year over two-year change(1) 2.0 to 6.0%
Scheduled service  revenue – year over two-year change, excluding fixed fee and other revenue(1) down 6 to 10%
Fuel cost per gallon $ 1.99
Full year 2021 guidance
CAPEX
Aircraft, engines and induction costs (millions) $115 to $125 $115 to $125
Capitalized Airbus deferred heavy maintenance (millions) $50 to $60 $50 to $60
Other capital expenditures (millions) $20 to $30 $40 to $50
Interest expense $50 to $55 $65 to $70
Recurring principal payments(2) $170 to $180 $170 to $180
(1) Year over two-year percentage changes compare 2021 to 2019
(2) Excludes $111 million 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)                                           1Q21 2Q21 3Q21 YE21
A319 (156 seats) 35 35 35 35
A320 (177 seats) 26 21 21 19
A320 (186 seats) 39 49 52 54
Total 100 105 108 108
The table above is provided based on the company’s current plans and may be subject to change

Top Copyright Photo: Allegiant Air Airbus A319-111 N319NV (msn 2503) LAX (Michael B. Ing). Image: 948907.

Allegiant aircraft slide show:

Allegiant reports 4Q and 2020 financial results

Allegiant Travel Company issued this report:

Allegiant Travel Company today reported the following financial results for the fourth quarter and full year 2020, as well as comparisons to the prior year:

Consolidated Three Months Ended
December 31,
Percent
Change
Twelve Months Ended
December 31,
Percent
Change
(unaudited) (in millions, except per
share amounts)
2020 2019 2020 2019
Total operating revenue $ 246.6 $ 461.1 (46.5) $ 990.1 $ 1,841.0 (46.2)
Operating income (loss) (23.6) 92.7 (125.5) (281.0) 364.0 (177.2)
Income (loss) before income taxes (39.2) 78.6 (149.9) (361.1) 301.2 (219.9)
Net income (loss) (28.8) 60.5 (147.6) (184.1) 232.1 (179.3)
Diluted earnings (loss) per share $ (1.79) $ 3.72 (148.1) $ (11.53) $ 14.26 (180.9)

 

Consolidated – adjusted Three Months Ended
December 31,
Percent
Change
Twelve Months Ended
December 31,
Percent
Change
(unaudited) (in millions, except per
share amounts)
2020 2019 2020 2019
Adjusted operating income (loss) (1) (2) $ (7.8) $ 92.7 (108.4) $ (140.1) $ 364.0 (138.5)
Adjusted income (loss) before income
taxes(1) (2)
(23.4) 78.6 (129.8) (193.6) 301.2 (164.3)
Adjusted net income (loss)(1) (2) (18.0) 60.5 (129.8) (149.1) 231.9 (164.3)
Adjusted diluted earnings (loss) per
share (1) (2)
$ (1.12) $ 3.72 (130.1) $ (9.33) $ 14.42 (164.7)
(1) Adjusted numbers exclude COVID related special charges, the benefit from the CARES Act payroll support program (as applicable), the benefit from the Employee Retention Credit (as applicable) and the portion of the tax benefit attributable to the CARES Act (as applicable).
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information.

“With the close of the fourth quarter, we completed the most challenging year the industry has faced in its history,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “We still have a long road ahead to a full recovery, but we are gaining momentum and moving in the right direction. We finished the quarter with an adjusted loss per share of $1.12 – an improvement of 81 percent when compared to our second quarter lows. The fourth quarter continued the trend of sequential improvement to total revenue, which came in at $247 million, up 85 percent from the second quarter. Similar improvements were seen in load factor at 58.2 percent. Booking trends suggest we will continue to see both revenue and load improvements into the first quarter.

Although the exact timing of a full recovery is unknown, the improvements observed in the fourth quarter coupled with the vaccine rollout suggest recovery is on the horizon. Furthermore, our internal weekly tracking surveys indicate customer travel intention has been improving for the last several weeks. Our 100 percent domestic network focusing on the leisure traveler and predicated around a low cost, low utilization model positions us favorably for a quick recovery.

From the onset of the pandemic, we have worked diligently to strengthen the balance sheet and improve cash balances. Arguably, our balance sheet is stronger today than a year ago. We are well positioned to be opportunistic related to our network and fleet as conditions improve. In early January, we announced service on 21 new routes, including three new cities. Preliminary booking trends on those routes have exceeded our expectations. Our current runway to grow the network has expanded to include over 1000 incremental routes. The flexibility of our model along with structural cost savings will enable us to continue improving the network in the months ahead.

The last ten months have been challenging, but I remain optimistic about 2021. I have been continually reminded of the quality of our team members throughout the pandemic. They have executed flawlessly, enabling us to lead the industry in the percentage of our schedule made available for sale and flown in 2020, with some of the highest load factors in the industry. They have assisted in removing structural costs from the business, enabling us to improve upon our already industry leading cost structure. Because of their efforts, I believe we will be among the first to return to profitability. I am very proud of the work they have done.”

Fourth Quarter 2020 Results

  • Adjusted loss per share(1) of $1.12, an improvement of 81 percent versus the second quarter and 74 percent as compared with the third quarter
  • Total revenue for the quarter was $246.6 million, down 47 percent versus the prior year, the lowest year over year reduction since the onset of the pandemic
    • Sequential quarterly improvement in total revenue with fourth quarter total revenue up 85 percent from the second quarter and 23 percent from the third quarter
    • Completed the quarter with a load factor of 58.2 percent, the highest quarter since the onset of the pandemic
    • Average total ancillary revenue per passenger (includes air-related and third party products) continues to remain strong at $57.18, nearly flat from prior year
  • Adjusted Operating CASM, excluding fuel(1) of 6.07 cents, down 10 percent from the prior year, on capacity reductions of 16 percent
  • Recognized total one-time, non-recurring, special charges related to COVID-19 of $25.4 million during the fourth quarter
  • Recognized a CARES Act employee retention credit of $9.6 million, which is recorded as an offset to salary and benefits expense
  • Announced 15 new non-stop routes including two new cities during the fourth quarter and another 21 new non-stop routes including three new cities in early January bringing total routes served to 543 and 129 cities

Full Year 2020 Update

  • Reported total revenue of $990.1 million, down 46 percent versus prior year, among the lowest revenue reductions in the industry
    • Reduced full year capacity by 19 percent, the smallest reduction in the industry, with reported load factors of 59.5 percent
    • Average total ancillary revenue per passenger (includes air-related and third party products) increased 3 percent versus 2019 to $58.46
  • Adjusted Operating CASM, excluding fuel(1) of 6.92 cents, up 7 percent from prior year on capacity reductions of 19 percent.
  • Employed a surgical approach to marketing efforts, which resulted in a full year decrease in cost per booking of 46 percent

(1) Adjusted numbers exclude COVID related special charges, the benefit from the CARES Act payroll support program (as applicable), the benefit from the Employee Retention Credit (as applicable) and the portion of the tax benefit attributable to the CARES Act (as applicable).

Balance Sheet, Cash and Liquidity

  • Total cash and investments at December 31, 2020 were $685 million
  • Total sources of liquidity received during the fourth quarter were $160 million
    • Issued $150 million of senior secured notes backed by same collateral package pledged to existing Term Loan
    • Received remaining $10 million related to a sale leaseback transaction that closed during the third quarter
  • Total sources of liquidity received during full year 2020 were $724 million
    • Includes $177 million related to the CARES Act payroll support program, $150 million in senior secured notes, $115 million in secured financings backed by aircraft and engines, $100 million upsize of Term Loan B, $94 million in tax refunds related to net operating loss carry backs, and $88 million in proceeds from sale leasebacks
    • Repaid $182 million in net principal payments during full year 2020
    • Total debt increased $237 million versus year end 2019 with debt, net of liquidity, as of December 31, 2020 at $974 million, roughly unchanged from December 31, 2019
  • Fourth quarter interest expense of $16 million, down 11 percent from prior year
  • $268 million in additional liquidity expected to be received during 1H21, none of which will increase debt balances
    • $92 million related to the extension of the CARES Act payroll support program, of which $45.9 million has been received
      • Entire $92 million will be recognized as a payroll expense offset during the first quarter of 2021
    • $147 million in federal income tax refunds related to 2019 and 2020 net operating losses
    • $29 million in various other tax refunds
  • Air traffic liability at December 31st was $308 million
    • Balance related to future scheduled flights is $86 million
    • Balance related to travel vouchers issued for future use is $222 million

Capital Expenditures

  • Fourth quarter spend was $105 million, which included $94 million for the acquisition of three aircraft and three engines along with induction costs, $6 million in other airline capital expenditures and $5 million in deferred heavy maintenance
    • Two aircraft initially intended to be purchased during the fourth quarter were delayed until the first quarter of 2021
  • Full year 2020 capital expenditures were $335 million, comprised of $206 million in aircraft and engine purchases, $45 million in deferred heavy maintenance, $38 million in other airline capital expenditures, and $46 million in non-airline projects
  • Full year 2021 capital expenditures, including deferred heavy maintenance, expected to be roughly $200 million
  • Includes two outstanding purchase agreements, two aircraft initially planned to be purchased during the fourth quarter of 2020, and newly signed purchase agreements for two aircraft
Guidance, subject to revision
First Quarter 2021 guidance
System ASMs – year over year change(1) 0.5 to 5.5%
Scheduled Service  ASMs – year over year change(1) 0.5 to 5.5%
Full year 2021 guidance
CAPEX
Aircraft, engines and induction costs (millions) $115 to $125
Capitalized Airbus deferred heavy maintenance (millions) $50 to $60
Other capital expenditures (millions) $20 to $30
Interest expense $50 to $55
Principal payments(2) $170 to $180
(1) Year over year percentage changes compare 2021 to 2019
(2) Excludes $46 million repayment of revolving credit facility as we expect to enter into an agreement for a new facility during 2021

Aircraft Fleet Plan by End of Period

Aircraft – (seats per AC) YE20 1Q21 2Q21 3Q21 YE21
A319 (156 seats) 34 35 35 35 35
A320 (177 seats) 25 27 23 20 19
A320 (186 seats) 36 39 47 53 54
Total 95 101 105 108 108
Aircraft listed in table above include return to service aircraft previously in storage and future purchase and lease aircraft under contract (subject to change)

Allegiant reports December 2020 traffic

Allegiant Travel Company reported preliminary passenger traffic results for December 2020.

“As expected, the fourth quarter highlighted the divergence in strength between peak travel periods and non-peak periods,” stated Drew Wells, vice president of revenue. “Demand remained soft throughout much of December before accelerating during the peak holiday travel period at the end of the month. Load factors during the peak period came in at nearly 60 percent, which aided in completing the quarter with a load factor of 58.2 percent, the best since the onset of the pandemic. Over the last several weeks, we have been encouraged by favorable forward booking trends as flight volumes begin to pick up mid-February and into peak Spring Break travel. We remain cognizant that the situation is fluid and will continue to manage capacity to meet the changing demand environment.”

Scheduled Service
December 2020 December 2019 Change
Passengers 673,041 1,308,341 (48.6%)
Revenue passenger miles (000) 611,429 1,165,902 (47.6%)
Available seat miles (000) 1,128,200 1,411,107 (20.0%)
Load factor 54.2% 82.6% (28.4pts)
Departures 7,281 9,423 (22.7%)
Average stage length (miles) 891 871 2.3%
4th Quarter 2020 4th Quarter 2019 Change
Passengers 2,129,292 3,516,263 (39.4%)
Revenue passenger miles (000) 1,878,831 3,073,055 (38.9%)
Available seat miles (000) 3,226,050 3,745,031 (13.9%)
Load factor 58.2% 82.1% (23.9 pts)
Departures 21,399 25,541 (16.2%)
Average stage length (miles) 868 856 1.4%
YTD 2020 YTD 2019 Change
Passengers 8,553,623 14,823,267 (42.3%)
Revenue passenger miles (000) 7,626,470 13,038,003 (41.5%)
Available seat miles (000) 12,814,080 15,545,818 (17.6%)
Load factor 59.5% 83.9% (24.4 pts)
Departures 85,276 105,690 (19.3%)
Average stage length (miles) 867 859 0.9%

 

Total System*
December 2020 December 2019 Change
Passengers 679,424 1,318,872 (48.5%)
Available seat miles (000) 1,147,534 1,453,592 (21.1%)
Departures 7,471 9,742 (23.3%)
Average stage length (miles) 883 868 1.7%
4th Quarter 2020 4th Quarter 2019 Change
Passengers 2,159,035 3,585,966 (39.8%)
Available seat miles (000) 3,315,599 3,928,536 (15.6%)
Departures 22,189 27,088 (18.1%)
Average stage length (miles) 860 846 1.7%
YTD 2020 YTD 2019 Change
Passengers 8,623,984 15,012,149 (42.6%)
Available seat miles (000) 13,125,533 16,174,240 (18.8%)
Departures 87,955 110,542 (20.4%)
Average stage length (miles) 862 855 0.8%

*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
December 2020 estimated average fuel cost per gallon – system $1.56
$ per gallon
4th quarter 2020 estimated average fuel cost per gallon – system $1.41

Allegiant Air aircraft photo gallery:

Allegiant Air aircraft slide show:

Allegiant loses $29.1 million in the third quarter

Allegiant Travel Company today reported the following financial results for the third quarter 2020, as well as comparisons to the prior year:

 

Consolidated Three Months Ended
September 30,
Percent Change Nine Months Ended
September 30,
Percent Change
(unaudited) (in millions, except per
share amounts)
2020 2019 2020 2019
Total operating revenue $ 201.0 $ 436.5 (54.0) % $ 743.5 $ 1,379.9 (46.1) %
Operating income (loss) (33.1) 72.1 (145.9) (257.3) 271.3 (194.9)
Income (loss) before income taxes (44.7) 56.9 (178.6) (321.9) 222.6 (244.6)
Net income (loss) (29.1) 43.9 (166.3) (155.3) 171.6 (190.5)
Diluted earnings (loss) per share $ (1.82) $ 2.70 (167.4) $ (9.75) $ 10.54 (192.5)
Consolidated – adjusted Three Months Ended
September 30,
Percent Change Nine Months Ended
September 30,
Percent Change
(unaudited) (in millions, except per share amounts) 2020 2019 2020 2019
Adjusted operating income (loss) (1) (2) $ (77.4) $ 72.1 (207.4) % $ (128.8) $ 271.3 (147.5) %
Adjusted income (loss) before income taxes(1) (2) (89.0) 56.9 (256.4) (166.8) 222.6 (174.9)
Adjusted net income (loss)(1) (2) (68.5) 43.9 (256.0) (128.4) 171.6 (174.8)
Adjusted diluted earnings (loss) per share (1) (2) $ (4.28) $ 2.70 (258.5) $ (8.07) $ 10.54 (176.6)
(1) Adjusted to exclude COVID related special charges, the benefit from the CARES Act payroll support program, and the portion of the tax benefit (as applicable) attributable to the CARES Act.
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information.

“As we continue to navigate through the pandemic we have been encouraged by the modest, yet consistent improvements during the third quarter and into the fourth,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “Consumer confidence towards air travel is improving as seen in our quarterly performance. We completed the quarter beating consensus with a loss per share of $4.28, excluding one-time, special items, and the benefit from the CARES Act. Our scheduled capacity year-over-year was down less than seven percent, perhaps the best showing in the industry. Revenue is also trending in the right direction with September totals down 43 percent versus prior year. Although we still have a long road ahead of us, the progress we’ve seen is a direct reflection of the quality of our people and the nimbleness of the model.

“As we move into the fourth quarter, we remain focused on cash management. Our cash preservation strategy continues to center around maintaining a broad selling presence as well as stripping costs from the business. Our revenue and planning teams have done an exceptional job optimizing our schedule available for sale. We’ve seen average daily gross bookings increase from just over $2 million per day during the third quarter to over $3 million per day thus far in the fourth quarter. On the cost front, we successfully reduced variable operating expenses by nearly 30 percent, excluding the CARES Act payroll support benefit and one-time special items, which outpaces our reduction in capacity more than threefold. These savings are important in paving the way to cash break-even. Our cash preservation strategies coupled with strategic capital raises over the last several weeks have contributed to our pro forma cash balance of $850 million.

“Even though we’re pleased with recent progress, we remain cautious. We have had to make tough decisions the past few months, including a reduction in our workforce. Although difficult, these steps were necessary to right size our organization to better align with demand. This environment has been difficult for our team members, and I cannot thank them enough for their continued hard work and dedication during this trying time. Their efforts to prioritize health and safety for our passengers, and our leadership efforts to bolster the financial health of the company have laid a solid foundation for our recovery. This has been and will continue to be a slow climb out of this abyss known as COVID. At this point, I believe we are leading the way out towards light ahead in the coming months and year.”

Covid-19 Responses – Update

  • Ranked by Safe Travel Barometer as #1 airline among North American carriers and among the top five worldwide for best COVID-19 Traveler Safety Measures, with results based on an independent audit of more than 150 airlines
  • Prioritizing the health and safety of our passengers and crew members by upholding the principles of our Going the Distance for Health and Safety program, which include enhanced cleaning protocols, air purity guidelines, and new service practices and boarding procedures designed to provide additional distancing between customers whenever possible
  • Accommodating travel flexibility by waiving change and cancellation fees for all customers with future travel through the end of 2020, extending the expiry on credit vouchers to two years, and offering an opt-in option within the booking path to alert customers if their flight has reached 65 percent capacity allowing the option to re-book or receive a refund
  • Reduced management and support teams by roughly 300 positions, which includes voluntary leaves
    • 25 percent reduction in these work groups
    • Includes 220 positions previously disclosed
    • Anticipated annual savings of roughly $20 million
  • Furloughed roughly 130 pilots, a 13 percent reduction
    • 100 furloughed as of October 1, with an additional 30 expected November 1

Third Quarter 2020 Results

  • Recorded positive cash inflows for the month of September, excluding a $5 million payment in connection with terminating the loan agreement intended to finance the development of Sunseeker Resorts Charlotte Harbor
  • Reduced scheduled third quarter capacity by 6.5 percent
    • Completed the quarter with load factor in the month of September of 57.4 percent, the highest month since the onset of the pandemic in March
  • Recognized total special charges related to COVID-19 of $33.6 million during the third quarter
  • Anticipate fourth quarter capacity to be reduced by 15 percent from prior year but will continue to adjust based on demand trends
  • Minimal close-in cancellations during the third quarter and anticipate the fourth quarter will be similar
  • Total revenue for the quarter was $201.0 million, down 54.0 percent year over year
    • September total revenue down 42.8 percent, the lowest monthly reduction since the onset of the pandemic
    • Average total ancillary revenue per passenger (includes air-related charges and third party products) remains strong, despite current yield pressure, at $55.70 per passenger, up 1.5 percent year-over-year
  • Operating expense was $234.1 million, down 35.8 percent year-over-year on reduced system-wide capacity of 9.4 percent
    • Variable operating expense, defined as total operating expense excluding the benefit of the CARES Act, one-time special items, aircraft leases, and depreciation and amortization, down 29.2 percent versus prior year
  • Advertising spend down 75 percent year-over-year, yet website visitors derived by either directly typing www.allegiant.com or by clicking on a marketing email promotional link are up 17 percent versus prior year
    • Customer conversion rate is up 36 percent from pre-pandemic levels
  • Named #1 airline co-branded credit card two years in a row by USA Today

Balance Sheet, Cash and Liquidity

  • Total cash and investments at September 30th was $709.8 million 
  • Total sources of liquidity received during the third quarter around $184.9 million
    • Obtained $84 million in financings secured by A320 aircraft and CFM engines
    • Entered into a sale leaseback transaction, which included the sale of four A320-series aircraft, three of which closed in the third quarter generating $30 million
      • Fourth sale closed in October, generating $10 million
    • Federal income tax refund of $48.7 million related to tax net operating losses from 2018
      • Expect a federal income tax refund in excess of $125 million related to 2020 net operating losses to be received during the first half of 2021
    • Additional payroll support related to the CARES Act of $22.2 million
  • In early October, issued $150 million of senior secured notes backed by collateral pledged to existing Term Loan
    • Cash balance pro forma for this financing in excess of $850 million
  • Debt, net of liquidity, as of September 30th was $840 million, down roughly $100 million from December 31, 2019
  • Third quarter interest expense down 38.8 percent versus prior year
  • 3Q20 daily cash burn averaged $1.3 million (1)                       
    • Gross bookings averaged just above $2.0 million per day during the quarter
    • Includes $15 million of payments to Sixth Street Partners (formerly TSSP) to terminate loan agreement intended to finance the development of Sunseeker Resorts Charlotte Harbor
  • As of September 30th, have 22 unencumbered aircraft and 4 unencumbered spare engines
  • Air traffic liability at September 30th was $334 million
    • Balance related to future scheduled flights is $116 million
    • Balance related to travel vouchers issued for future use is $218 million

(1) Daily cash burn defined as cash from operations less scheduled debt and rent payments and capital expenditure outflows excluding aircraft and engine acquisitions as they are expected to be financed. Excludes benefits received from CARES Act such as Payroll Support Program funding and tax refunds from net operating loss carry-backs.

Capital Expenditures

  • Remaining 2020 spend related to capital expenditures is roughly $130 million
    • Includes five previously executed purchase commitments for aircraft
    • Roughly $10 million of deferred heavy maintenance
  • Full year 2021 capital expenditures, including deferred heavy maintenance, expected to be roughly $125 million
    • Includes two previously executed purchase commitments for aircraft
  • Expect to have 93 operating aircraft at year end 2020
    • Does not include owned aircraft currently in storage programs