Category Archives: Allegiant Travel Company

Allegiant Air’s pilots to meet with investors and analysts about safety concerns

Allegiant Air‘s (Las Vegas) pilots have issued this statement:

Allegiant Air’s pilots, represented by the Allegiant Air Pilots Executive Council, an employee group of Allegiant Travel Company (Las Vegas) and pilots represented by Teamsters Local Union 1224 in Wilmington, Ohio, announced plans to begin formal dialogues with Allegiant stakeholders and other influential voices in the financial community, including institutional shareholders, equity analysts, corporate lenders and insurers, in order to address operating and safety concerns that exist at the airline.

“Allegiant management has turned a deaf ear to serious operational concerns raised by the pilots,” said Capt. David Bourne, Director of Airline Division at the International Brotherhood of Teamsters. “We believe Allegiant’s financial backers have a right to know what is going on and be given a chance to weigh in on vital changes needed for Allegiant’s long-term success before it’s too late.”

“Allegiant’s low-cost model works if it can actually support the growth of the business,” Bourne said, “However, management’s lack of operational know-how and flat-out resistance to put badly needed investments into infrastructure is taking a significant toll on flight operations, which could ultimately jeopardize flight safety. It’s obvious to us that the major service disruptions over the last several months, ranging from multiple fleet shutdowns, chronic staffing and equipment shortages, significant ramp-up in 3rd party contracting for scheduled flights and sub-servicing and the shutdown of the company’s training department, all flow from the short-sighted decisions being made at the top.”

“It is very unusual for a company’s training department to be shut down,” said Dan Wells, President of Teamsters Local 1224. “Allegiant has yet to even acknowledge the training shutdown, much less show its pilots a plan for corrective action or indicate if those changes will adequately satisfy Federal Aviation Administration concerns. Many Allegiant pilots have been delayed in training for months, which we believe is driving a major increase in outsourcing due to the shortage of company pilots to fly scheduled flights and re-route equipment back to hubs and maintenance centers.”

“Management has ignored repeated requests for clarity on the training program by both the union and Allegiant’s own pilots,” Bourne said. “We’ve filed a Freedom of Information Act submission with the FAA on the matter, but the agency’s only reply was that there is an ongoing investigation at the company. In the meantime, Allegiant pilots continue to bend over backwards to work with the company to address the very significant issues that are interfering with the ability of Allegiant flight crews to do their jobs properly and service customers effectively. We are hopeful that conversations with investors and other Allegiant stakeholders will lead to a breakthrough on some of the key obstacles affecting the future of the airline.”

Copyright Photo: Jay Selman/AirlinersGallery.com. Allegiant Air’s Boeing 757-204 WL N904NV (msn 26967) arrives at the Las Vegas base.

Allegiant Air:

Allegiant Travel Company reports net income of $17.1 million in the 3Q, up 1%

Allegiant Travel Company (Allegiant Air) (Las Vegas) reported the following financial results for the third quarter 2013, as well as comparisons to prior year equivalents:

Unaudited	3 months endedSept 30,
	2013			2012			Change
Total operating revenue (m)	$	228.9		$	216.9		5.5	%
Operating income (millions)	$	29.2		$	28.7		1.7	%
Operating margin	12.8		%	13.3		%	(0.5)pp
EBITDA (millions)	$	46.7		$	44.6		4.7	%
EBITDA margin	20.4		%	20.6		%	(0.2)pp
Net income (millions)	$	17.1		$	16.9		1.0	%
Diluted earnings per share	$	0.91		$	0.87		4.6	%

“We are very proud to report our 43rd consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We are pleased to produce another profitable quarter and be able to return cash to shareholders through our share repurchase program. In addition, I am proud to announce that Andrew Levy has been added to our Board of Directors and will also assume the role of Chief Operating Officer. His proven leadership abilities and extensive operational and financial expertise, as well as a deep understanding of the airline business, will be invaluable in his new role as COO.”

“Finally, we were significantly challenged operationally at the end of September many of our MD-80s were taken out of service due to an evacuation slide issue. Through the tireless efforts of our Team Members, we were able to minimize the disruption to our customers. I am very thankful to all of those individuals who worked extremely hard to put the operation back together in such a short amount of time.”

Notable Company Highlights

Completed the acquisition of five Airbus A320 aircraft. The company now owns seven A320s
Repurchased 491,000 shares for $47 million during the third quarter, average purchase price of $95.85 per share
Announced service from nine existing cities to Punta Gorda (Southwest Florida) to begin in the fourth quarter
Announced service to 12 new cities with service beginning in the fourth quarter and first quarter
Announced 29 new routes which will begin operation in the fourth quarter
Average aircraft in service was flat versus last quarter as we retired three MD-80 aircraft and temporarily grounded two MD-80 aircraft early in the quarter
Increasing MD-80 operating fleet from 52 at the end of the year to 53 in the first quarter of 2014

Third Quarter 2013 Revenue Performance

15th consecutive quarter of year over year increases in total average fare, 4.8 percent higher than a year ago
Florida TRASM grew by 9.6 percent despite 12.7 percent growth in ASMs
Same store markets, those which were operated in both the third quarter 2013 and 2012, generated a 5.0 percent increase in TRASM
Grew scheduled load factor to 90.8 percent despite a 4.2 percent increase in seats per departure
The September slide interruption resulted in approximately $1 million in refunds given to customers

	3Q13		3Q12		Change
Scheduled Service:
Average fare – scheduled service	$86.94		$82.30		5.6	%
Average fare – ancillary air-related charges	$38.99		$37.05		5.2	%
Average fare – ancillary third party products	$5.06		$5.59		(9.5	)%
Average fare – total	$130.99		$124.94		4.8	%
Scheduled service passenger revenue per ASM (PRASM) (cents)	8.14		7.89		3.2	%
Total scheduled service revenue per ASM (TRASM) (cents)	12.26		11.98		2.3	%
Load factor	90.8	%	90.1	%	0.7pp
Passengers (millions)	1.7		1.6		6.3	%
Average passengers per departure	150		143		4.9	%
Average scheduled service stage length (miles)	932		910		2.4	%

ASMs = available seat miles
PRASM = scheduled passenger revenue per scheduled available seat mile
TRASM = (scheduled passenger revenue + ancillary air revenue + ancillary third party revenue) per scheduled available seat mile

Third Quarter 2013 Cost Performance

Fuel expense per ASM declined 3.9 percent primarily due to a 5.8 percent increase in ASMs per gallon versus last year, which more than offset a 1.9 percent increase in average cost per gallon
Operating expense excluding fuel was negatively impacted by lower aircraft utilization and approximately $2 million in expense attributable to the evacuation slide interruption. The expense associated with the slide event is isolated to September and resulted in higher aircraft lease rentals expense as we contracted with other carriers for sub-service of aircraft to move some of our customers, higher station operations expense due to customer interrupted trip costs, and increased salary and benefits expense due to additional overtime
Salary and benefits expense per passenger increased 15 percent versus last year primarily due to an increase in the number of full time equivalents to support our growth, higher stock-based compensation expense and the continuation of the higher pay band for pilots which began in November 2012. The current pay band will continue through April 2014 when it will be subject to adjustment based on a trailing 12 month profitability test. Based on our forecasted profitability, we currently expect the pilot pay band to remain unchanged
Depreciation and amortization expense per passenger increased 8 percent primarily due to a change in estimated MD-80 engine residual values and useful life, and operating a larger contingent of 166 seat MD-80 aircraft
Other expense per passenger increased 31 percent due to a higher write-down of engine values in our consignment program compared to the prior year, non capitalizable information technology development costs, crew training for our growing Airbus fleet and costs to support a seasonal operating base in Los Angeles

	3Q13	3Q12	Change
Total System*:
Operating expense per passenger	$114.54	$108.92	5.2	%
Operating expense per passenger, excluding fuel	$63.37	$56.85	11.5	%
Operating expense per ASM (CASM) (cents)	10.58	10.29	2.8	%
Operating expense, excluding fuel per ASM (CASM ex fuel) (cents)	5.85	5.37	8.9	%
Average block hours per aircraft per day	5.1	5.2	(1.9	)%

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

Fourth Quarter 2013 Cost Trends

Salary and benefits expense is expected to increase due to additional staff required to support our growth
Maintenance and repair expense is expected to be slightly higher than fourth quarter 2012. For the full year, maintenance expense per aircraft per month is expected to be $100 thousand to $105 thousand as previously guided
Aircraft utilization is expected to decline 1.5%, which will pressure ex fuel unit costs when compared to fourth quarter 2012
Depreciation and amortization expense is expected to increase as seven A320 aircraft are scheduled to enter service in the fourth quarter. For the full year, depreciation per aircraft per month is expected to be between $92 thousand and $95 thousand, as previously guided

Third Party Products Performance

Rental car days increased 6.5 percent primarily due to a 18 percent increase in Florida passengers
Hotel net revenue excluding the effect of an air discount was higher by 39 percent versus last year. The company has phased out offering an air discount which has historically subsidized hotel sales

Supplemental Ancillary Revenue Information Unaudited (millions)	3Q13		3Q12		Change
Gross ancillary revenue – third party products	$28.7		$28.3		1.4	%
Cost of goods sold	($19.6	)	($18.5	)	5.9	%
Transaction costs*	($0.5	)	($0.8	)	(37.5	)%
Ancillary revenue – third party products	$8.6		$9.0		(4.4	)%
As percent of gross	30.1	%	31.9	%	(1.8)pp
As percent of income before taxes	31.3	%	33.6	%	(2.3)pp
Ancillary revenue – third party products/scheduled passenger	$5.06		$5.59		(9.5	)%

Hotel room nights (thousands)	144.4		163.4		(11.6	)%
Rental car days (thousands)	195.3		183.3		6.5	%

*Includes payment expenses and travel agency commissions.

Balance Sheet Highlights

Repurchased 491,000 shares for $47 million and have over $43 million in repurchase authority remaining. Year to date, the company has repurchased 880,991 shares at an average price of $85.64 per share
Issued $48.0 million in debt secured by four Airbus aircraft
Pre-paid $10.5 million in debt secured by four 757 aircraft
Spent $84.5 million in capital expenditures in the third quarter, the majority of which was driven by the purchase of five Airbus A320 aircraft
Closed a $10 million debt financing in October, secured by our new headquarters building acquired earlier this year

Unaudited (millions)	9/30/2013	12/31/2012	Change
Unrestricted cash*	$303.6	$352.7	(13.9	)%
Total debt	$179.7	$150.9	19.1	%
Total Allegiant Travel Company stockholders’ equity	$402.4	$400.5	0.5	%

Nine months ended September 30,
Unaudited (millions)	2013		2012
Capital expenditures	$161.6	$88.8		82.0	%

*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	October 2013	4Q13
Estimated PRASM year-over-year change	5 to 7%	3 to 5%
Estimated TRASM year-over-year change	1 to 3%	0.5 to 2.5%

Fixed fee and other revenue guidance		4Q13
Fixed fee and other revenue (millions)		$3 to $5

Capacity guidance
System	4Q13	1Q14	FY13
Departure year-over-year growth	(4) to 0%	8 to 12%
ASM year-over-year growth	4 to 8%	10 to 14%	8 to 10%
Scheduled
Departure year-over-year growth	2 to 6%	8 to 12%
ASM year-over-year growth	8 to 12%	10 to 14%	13 to 15%

Cost guidance	4Q13		FY13
CASM ex fuel – year-over-year change	4.5 to 6.5%		4 to 5%

CAPEX guidance			FY13
Capital expenditures (millions)			$170 to $180

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

Aircraft fleet plan by end of period

Aircraft	4Q13	4Q14
MD-80 (166*)	51	53
MD-80 (non 166*)	1	–
757	6	6
A319	3	4
A320	7	9
Total	68	72

*166 refers to MD-80s that have been converted to 166 seat aircraft, non 166 refers to those aircraft that will not be converted
Aircraft listed in table above include only in service aircraft

In other news, the company announced new, nonstop jet service from Cincinnati-Northern Kentucky International Airport to Orlando-Sanford International Airport starting on February 12, 2014 and Punta Gorda Airport beginning on February 14, 2014.

This announcement marks the 100th U.S. city served by Allegiant’s low-cost, nonstop service to popular vacation destinations, more than any other low-cost carrier in the U.S.

Copyright Photo: Tony Storck/AirlinersGallery.com. Allegiant Air’s McDonnell Douglas DC-9-82 (MD-82) N408NV (msn 53246) in the Blue Man Group special livery lands at the Las Vegas hub and base. Allegiant moved to Concourse A at LAS on October 15.

Allegiant Air:

Allegiant’s 2Q net profit increases to $25.8 million

Allegiant Travel Company (Allegiant Air) (Las Vegas) reported a net income of $25.8 million in the second quarter, up 2.3 percent from the same quarter a year ago. This represents the 42nd consecutive profitable quarter.

Read the full report: CLICK HERE

Copyright Photo: Bruce Drum/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N879GA (msn 53486) approaches the Las Vegas base for landing dressed in the old 2003 livery.

Allegiant Air:

Allegiant Air to fly between Los Angeles and Honolulu, starting at $99 OW

Allegiant Air (Las Vegas) has announced new, twice-weekly nonstop jet service between Los Angeles and Honolulu beginning on October 30, 2013.

In March 2010, the company announced it signed a forward purchase agreement to acquire six Boeing 757-200 aircraft that enabled Allegiant to expand its leisure travel strategy into Hawaii with flights beginning in summer 2012.

Allegiant currently operates a fleet of 57 McDonnell Douglas DC-9-80 (MD-80) aircraft, six Boeing 757-200 aircraft, and one Airbus A319 aircraft. The Company has agreements to acquire eight additional Airbus A319 aircraft and nine Airbus A320 aircraft, which will be introduced throughout 2013 and the beginning of 2014.

Allegiant Air:

WSJ: Allegiant Air: The Tardy, Gas-Guzzling, Most Profitable Airline in America

Allegiant Air (Las Vegas) is under the financial analysis of the Wall Street Journal in a special detailed article by Jack Nicas that explores why this fast-growing airline is the most profitable airline in the United States. This low-fare airline, which breaks most of the industry “rules”, has been off the radar screens of most of the mainstream media for a long time, except in the smaller cities where a new Allegiant route to Las Vegas, Arizona, California, Hawaii or Florida grabs local headlines. Allegiant has the “lowest costs, fullest planes and highest margins” in the United States according to this article. The secret formula, as we have detailed, is flying mostly older planes that others no longer want from cities that are too small for the others to care about to exciting vacation destinations on a limited number of peak traffic days. Allegiant Air also makes a lot of ancillary revenue from its travel packages, taking a page out of the Ryanair playbook. Allegiant aims to be the total travel package airline for the traveller. The business plan is working well.

Now Allegiant is planning to expand in Mexico. This article details the growth and its expansion plans.

Read the full article: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Most airlines cannot get rid of these older, fuel-guzzling McDonnell Douglas MD-80s fast enough. Not Allegiant, they love the type and only fly their aircraft when they can make money. During mid-week, when most passengers are already at their holiday destinations, Allegiant parks most of its inefficient, fuel-guzzling fleet. Allegiant only flies when it can make money. Departing on a weekend, former SAS McDonnell Douglas DC-9-83 (MD-83) departs from Los Angeles International Airport.

Allegiant Air:

Route Map:

Video: Allegiant Air TV commercial:

Allegiant’s 1Q net profit increases to $31.9 million

Allegiant Travel Company (Allegiant Air) (Las Vegas) reported the following financial results for the first quarter 2013:

Unaudited	1Q13	1Q12	Change
Total operating revenue (millions)	$273.0	$237.9	14.8%
Operating income (millions)	$52.4	$36.3	44.2%
Operating margin	19.2%	15.3%	3.9pp
EBITDA (millions)	$69.4	$48.3	43.6%
EBITDA margin	25.4%	20.3%	5.1pp
Net income (millions)	$31.9	$21.7	47.1%
Diluted earnings per share	$1.65	$1.12	47.3%

“We are very proud to report our 41st consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “The month of March is typically our busiest month of the year, and this year was no different. Thanks to the tireless efforts of our Team Members, we have had another profitable quarter.”

Notable company quarterly highlights

Began flying our first A319 on March 1, 2013, the second A319 on April 4, 2013
Repurchased over 284,000 shares for $22.2 million dollars, average purchase price of $78.15
Received board approval to increase share repurchase authority to $100 million
Completed the 166 seat MD-80 conversion project in February
Added two new small cities Provo, UT and Reno, NV
Added eight routes in the quarter
Announced five routes which will start in the second quarter, including one new city, Little Rock, AR
Operated 198 routes in the first quarter of 2013. Expect to operate 203 routes in the second quarter of 2013

First quarter 2013 revenue performance

13^th consecutive quarter of year over year increases in total average fare
First quarter 2013 average fare, average ancillary air per passenger, and total fare were the highest in the company’s history
First quarter TRASM increased by 1.2 percent even though we increased average scheduled service stage length by 4.9 percent and scheduled service ASMs grew by 17 percent
Load factor returned to a normalized rate closer to 90%
Same store markets, those which were operated in the first quarter 2012 and 2013, had a 4.3 percent TRASM increase versus the system average of 1.2 percent
Fixed fee revenue’s decline is attributable to no longer operating two aircraft in track charter programs as previously disclosed

	1Q13	1Q12	Change
Scheduled Service:
Average fare – scheduled service	$97.54	$94.95	2.7%
Average fare – ancillary air-related charges	$41.64	$32.39	28.6%
Average fare – ancillary third party products	$5.81	$5.36	8.4%
Average fare – total	$144.99	$132.70	9.3%
Scheduled service passenger revenue per ASM (PRASM) (cents)	8.60	9.04	(4.9)%
Total scheduled service revenue* per ASM (TRASM) (cents)	12.79	12.64	1.2%
Load factor	89.8%	91.1%	(1.3)pp
Passengers (millions)	1.8	1.7	8.4%
Average passengers per departure	148	138	7.2%
Average scheduled service stage length (miles)	978	932	4.9%

* Total scheduled service revenue includes scheduled service, ancillary air-related charges, and ancillary third party products revenue.
ASMs = available seat miles
PRASM = scheduled passenger revenue per scheduled available seat mile

First quarter 2013 cost performance

Operating CASM, excluding fuel increased only 0.2 percent to 5.18 cents despite an almost eight percent decrease in aircraft utilization for the same time period due to a higher concentration of flying during peak periods
Operating expense per ASM decreased by three percent even though our average fuel expense per gallon increased by three percent. System ASMs per gallon of fuel improved to 67.3; a 9.6 percent increase versus the first quarter 2012
Maintenance and repairs expense per passenger decreased by 19.2 percent due to a more normalized rate of engine overhaul expense compared to unusually high levels in the first quarter of 2012
Salary and benefits expense per passenger increased by 18.4 percent due mainly to increases in pilot compensation. As we reached a trailing twelve month operating margin of 14 percent in November of 2012, our pilots moved into a higher pilot pay rate band per our compensation agreement with our pilot work group. Additionally, higher flight attendant headcount resulting from the increased gauge of our MD-80 aircraft and operating six 757 aircraft as opposed to one during the first quarter 2012
Depreciation and amortization per passenger increased 35 percent primarily due to accelerated depreciation from the announced retirement of six MD-80s from first quarter 2013 through third quarter 2013, along with higher depreciation stemming from 51 converted 166 seat MD-80s at the end of the quarter versus 17 a year ago
Other expense per passenger increased 35 percent primarily attributable to a higher write-down of engine values in our consignment program

	1Q13	1Q12	Change
Total System*:
Operating expense per passenger	$117.31	$112.03	4.7%
Operating expense per passenger, excluding fuel	$59.62	$55.10	8.2%
Operating expense per ASM (CASM) (cents)	10.20	10.52	(3.0)%
Operating expense, excluding fuel per ASM (CASM ex fuel) (cents)	5.18	5.17	0.2%
Average block hours per aircraft per day	5.9	6.4	(7.8)%

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

Second quarter 2013 cost trends

Salary and benefit expense is still subject to the same pressures as in the first quarter including the higher pilot pay band in effect
We expect the bulk of the engine and heavy airframe maintenance for the year will be incurred in the second and third quarters. For the full year, we are still anticipating maintenance per aircraft per month to be between $100 thousand and $110 thousand which has been our normalized historical run rate
Second quarter depreciation expense will still feel the impact of the accelerated depreciation reflected in the first quarter and to a lesser extent the higher depreciation from the converted 166 seat MD-80s as we had converted 27 aircraft by the end of June 2012. Four of the MD-80s driving the bulk of the accelerated depreciation are scheduled to be retired in the third quarter of 2013. In addition, we are expecting higher depreciation in the fourth quarter as we are currently expecting to place seven A320s into service by the fourth quarter of 2013.

Copyright Photo: Keith Burton. Allegiant introduced the first Airbus A319 into operations on March 1. The second was introduced on April 4. The former easyJet (Switzerland) A319-111 HB-JZN became N302NV (msn 2387) when it was delivered on February 11, 2013. The airliner is leased from GECAS.

Allegiant:

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:

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: