Tag Archives: Allegiant Air

Allegiant announces a new base in the Lehigh Valley, PA

Allegiant Air made this announcement:

State and local officials joined executives from Allegiant Travel Company today as the company announced plans to establish a two-aircraft base at Lehigh Valley International Airport (ABE) in Lehigh County, Pennsylvania. Allegiant’s growth plans in the state include creating at least 66 new, high-wage jobs.

The Las Vegas-based company is investing $50 million to establish its new base of operations, which will house two Airbus aircraft. The company, which focuses on linking travelers in small-to-medium cities to world-class leisure destinations, plans to begin its base operations at Lehigh Valley International Airport on February 12, 2020. Lehigh Valleywill become the airline’s 18th aircraft base.

The Lehigh Valley is a two-county region in eastern Pennsylvania consisting of 62 municipalities and three cities; Allentown, Bethlehem, and Easton. Located one hour north of Philadelphia and 90 minutes west of New York City, the Lehigh Valley is the 69th largest metropolitan region in the United States, with a $40.1 billion GDP that is larger than that of two entire states, Wyoming and Vermont. With more than 15,000 businesses contributing to an incredibly diverse industry base, Lehigh Valley is the fastest growing and third most populous region in the state of Pennsylvania, with a population of more than 670,000 residents. Site Selection named the Lehigh Valley one of the top five fastest-growing regions with under a million people in the United States in 2018, and the fastest-growing region of its size in the Northeast U.S. for a third consecutive year.

Allegiant began operating at ABE in 2005 and currently offers seven nonstop routes – to Fort Lauderdale/HollywoodSanford, St. Petersburg-Clearwater and Punta Gorda, Florida; Myrtle Beach, South Carolina; Nashville, Tennessee and Savannah, Georgia.  Allegiant currently carries more than 280,000 annual passengers through Lehigh Valley.

Current routes from ABE:

New routes announced:

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Raiders, Allegiant agree on naming rights deal for Las Vegas Stadium

The Raiders and Allegiant Air today announced an agreement for the naming rights to Las Vegas Stadium, the under-construction future home of the Raiders and UNLV football.

This partnership with the Raiders presents a global branding opportunity for the Las Vegas-based company as Allegiant will have its name showcased on the 1.75 million-square-foot, state-of-the-art domed stadium that will also host many world-class major sports and entertainment events.

Allegiant Stadium will also serve as site of the Las Vegas Bowl beginning in 2020, which will feature a Pac-12 football opponent versus either a Big Ten or SEC opponent, as well as the 2020 and 2021 Pac-12 Football Championship Game.

With 55 nonstop routes from cities across the country, Allegiant brings more than 1.2 million customers to Las Vegas each year. Allegiant’s affordable, all-nonstop flights – along with special fan travel packages – will offer Raiders fans everywhere unprecedented access to see their favorite team.

This partnership will allow Allegiant to feature exterior signage at the transformational facility that is set to become the latest jewel along the internationally-known, iconic skyline of the Las Vegas Strip.

The Raiders and Allegiant are also teaming up to provide additional enhancements, rewarding customers and fans with unique in-game and season-long promotions including the “Allegiant Connection of the Game” linking a lucky fan to their favorite Raiders player, and an opportunity to win “Fan Traveler of the Year” honors.

The Raiders and Allegiant share a deep commitment to the community which offers even more synergy to the partnership as they will unite in programs and activations that benefit Southern Nevada residents.  Headquartered in Las Vegas, Allegiant currently generates nearly $3 billion in annual economic impact for the state of Nevada.

Legends Global Partnerships represented the Raiders to secure the naming rights agreement with Allegiant as a part of their duties as the stadium’s official premium ticketing and sponsorships agency.

Allegiant Travel Group reports its second quarter 2019 results

Allegiant Air Airbus A320-214 WL N247NV (msn 7704) FLL (Bruce Drum). Image: 104577.

Allegiant Travel Company (Allegiant Air) has reported the following financial results for the second quarter 2019, as well as comparisons to the prior year:

Consolidated Three Months Ended
June 30,
Percent Six Months Ended
June 30,
Percent
(unaudited) 2019 2018 Change 2019 2018 Change
Total operating revenue (millions) $ 491.8 $ 436.8 12.6 % $ 943.4 $ 862.2 9.4 %
Operating income (millions) 108.1 74.2 45.7 199.2 154.2 29.2
Net income (millions) 70.5 50.0 41.0 127.7 105.2 21.3
Diluted earnings per share $ 4.33 $ 3.10 39.7 % $ 7.84 $ 6.52 20.2 %
Airline only Three Months Ended
June 30,
Percent Six Months Ended
June 30,
Percent
(unaudited) 2019 2018 Change 2019 2018 Change
Airline operating revenue (millions) $ 486.8 $ 434.6 12.0 % $ 935.1 $ 858.9 8.9 %
Airline operating income (millions) 115.5 76.1 51.8 214.0 158.0 35.4
Airline operating margin(2) 23.7 % 17.5 % 6.2 22.9 % 18.4 % 4.5
Airline diluted earnings per share(1) $ 4.81 $ 3.21 49.8 $ 8.80 $ 6.75 30.4
Airline CASM ex fuel (cents)(1) 5.65 6.02 (6.1 ) 6.00 6.17 (2.8 )

(1) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information.
(2) Percent point change

“I’m happy to report the second quarter of 2019 was Allegiant’s 66th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “We commented last quarter about the benefits of our all Airbus fleet. These benefits are continuing and increasing. We led the industry in Q1 with a 22 percent airline operating margin; this quarter the airline generated a 24 percent operating margin, a six percentage point increase from the previous year. And we accomplished these results with seven fewer aircraft this year compared to 2018. The fuel efficiencies of the Airbus continue to impress. We consumed 4.9 percent more fuel in Q2 compared to last year but produced 13.4 percent more ASMs. Correspondingly, our CASM ex-fuel declined 6.1 percent year over year. I’m comfortable stating we believe we will be the only carrier this quarter who had lower unit costs this year versus last year.

“On the revenue front, scheduled service revenue was $11 million per aircraft during the first six months of the year, over $2 million more than last year’s per aircraft revenue during the same period. Additionally, we generated approximately $3.5 million of EBITDA per aircraft in the same period or about $1.1 million greater per aircraft than the same period last year.

“Our operations continue to excel. We have solely led or tied for the industry lead in completion factor every month in 2019.  One of our challenges in the past few years has been our ability to scale our operations during our peak periods in the summer months and maintain a high completion rate.  In June 2018, we were number five in completion rate; this year we were number one. I’m happy to report we have had only ten days where we have had a mechanical cancellation since the beginning of the year.

“This combination of superior financial results and industry-leading operational performance, along with the proprietary model we have developed and continue to operate is a tribute to our excellent team members. Looking forward, we are excited about the opportunities in front of us including our ability to operate our leisure model to Mexico and the Caribbean in the coming years.”

New Routes:

Airline operational highlights

•         Departures in the second quarter up 13.8 percent year over year despite seven fewer average aircraft in service
•         Average number of aircraft in service decreased 7.6 percent from 92 to 85 year over year
•         Spare aircraft reduced from twelve down to four spares year over year
•         Block hour utilization increased by 20.5 percent to 8.8 block hours per aircraft per day
•         Led industry in completion every month in 2019
•         Maintenance cancellations down 87.6 percent year over year
•         On time performance (A-14) for the quarter was 77.7 percent up 2.8pts year over year
•         Net promoter score is up an average of 8pts year over year
•         Irregular operation costs – second quarter down $7.2 million or 57.6 percent

Airline only second quarter 2019 results

•         Diluted earnings per share were $4.81, up 49.8 percent year over year
•         23.7 percent operating margin for the quarter and 22.9 percent year to date
•         TRASM decreased 1.6 percent on capacity growth of 13.6 percent
•         May TRASM grew 2.4 percent on 11 percent growth in ASMs
•         June TRASM grew 0.7 percent on 13.5 percent growth in ASMs
•         Total fare is down only 0.5 percent despite increasing aircraft utilization by 20.5 percent
•         Year-to-date average total fare has increased 1.0 percent to $120.49
•         Fixed fee flying revenue increased 63.2 percent
•         Fuel gallons used increased only 4.9 percent on ASM growth of 13.4 percent
•         Increase in ASMs per gallon of 8.1 percent to 82.3
•         Airline unit cost excluding fuel decreased by 6.1 percent
•         Maintenance and operational improvements were the largest drivers

Liquidity and shareholder returns

•         Total cash and investments at June 30 were $695 million
•         Paid off high yield bond balance of $102 million in July
•         Currently, we have 26 unencumbered aircraft
•         $81 million available under the revolving credit facility
•         Returned $11 million in dividends in the second quarter
•         Expect to pay dividend of $0.70 per share on September 27, 2019 to shareholders of record as of September 20, 2019

Non-airline highlights

•         Non-airline businesses resulted in a combined operating loss of $7.4 million during second quarter
•         Evaluating strategic alternatives for Teesnap
•         Triggered the business classification of an entity held for sale in July 2019
•         SunseekerResorts FY19 CAPEX reduced to a range between $150 and $175 million
•         Operated two family entertainment centers (FEC’s) during second quarter
•         Rebranded FEC’s from G4CE to Allegiant Nonstop effective June 1, 2019

Aircraft fleet plan by end of period
Aircraft – (seats per AC) YE18 1Q19 2Q19 3Q19 YE19
A319 (156 seats) 32 37 37 37 38
A320 (177/186 seats) 44 47 49 53 55
Total 76 84 86 90 93

Aircraft listed in table above include only in-service aircraft and future aircraft under contract (subject to change)

Top Copyright Photo: Allegiant Air Airbus A320-214 WL N247NV (msn 7704) FLL (Bruce Drum). Image: 104577.

Allegiant Air aircraft slide show:

Route Map:

Allegiant Travel Company reports its first quarter financial results

Allegiant Air Airbus A320-214 WL N250NV (msn 7743) BWI (Tony Storck). Image: 943561.

Allegiant Travel Company today reported the following financial results for the first quarter 2019, as well as comparisons to the prior year:

Consolidated Three Months Ended March 31,
(unaudited) 2019 2018 Change
Total operating revenue (millions) $ 451.6 $ 425.4 6.2 %
Operating income (millions) 91.1 80.0 13.9
Net income (millions) 57.1 55.2 3.5
Diluted earnings per share $ 3.52 $ 3.42 2.9
Airline only Three Months Ended March 31,
(unaudited) 2019 2018 Change
Airline operating revenue (millions) $ 448.3 $ 424.3 5.7 %
Airline operating income (millions) 98.5 82.0 20.1
Airline operating margin 22.0 % 19.3 % 2.7
Airline diluted earnings per share* $ 3.98 $ 3.54 12.4
Airline CASM ex fuel (cents) * 6.40 6.35 0.8

*Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information.

“I’m happy to report the first quarter of 2019 was Allegiant’s 65th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “This quarter demonstrated the earnings potential of our all-Airbus fleet. Despite having eleven fewer aircraft compared to the same period last year, our airline’s operating income rose more than $16 million and we had a 22 percent margin.  In addition, our operational performance was exceptional, with a controllable completion rate of 100 percent for the quarter.  Our on-time performance for March – one of the busiest months of the year – was 85 percent.  These results were due to the exceptional work of our team.

“In March we broke ground on Sunseeker Resorts Charlotte Harbor in Southwest Florida, and also partnered with TPG Sixth Street Partners to finance some of the construction costs to build the project,” he continued. “We have an ideal location, a database of 16 million customers, and an infrastructure to feed customers to our property through Punta Gorda Airport (PGD) and St. Pete/Clearwater International Airport (PIE). This is a natural extension of our business model. These next two years will be investment years in our non-airline projects such as Sunseeker Resorts, the Allegiant Nonstop family entertainment centers and our golf offering.  All of these products will enable us to interact with an ever-expanding universe of leisure customers, to offer more options under the Allegiant Travel Company umbrella.

“I want to thank all of our Allegiant team members for their excellent efforts the past quarter.  The improvement in our operations, the reliability and the on-time performance could not have been achieved without their exceptional work. They are the most critical component in our continued financial success.”

2019 highlights and trends

  • Maintaining EPS guide of $13.25 to $14.75increasing full year fuel cost to $2.26 from $2.10 per gallon
  • EPS in Q2 should exceed Q1 because of Easter and additional available aircraft
    • Only happened twice before in past ten years
  • Easter shift expected to benefit TRASM for Q2 2019 between 2.0 and 2.5 percent
  • Available seat mile (ASM) growth is expected to be lowest in Q1 and highest in Q2
    ASM growth in Q2 expected to be between 13 and 14 percent
  • Airline CASM ex fuel is expected to be down year over year in each remaining quarter with the largest decrease in Q4
  • Submitted US DOT application for international flying into Mexico and expect to begin selling flights by YE19

Airline only first quarter 2019 results

  • Diluted earnings per share were $3.98, up $0.44 year over year
  • 22 percent operating margin for the airline
    • Highest since the second quarter of 2017 when the fuel price per gallon was $1.71
  • Despite an estimated 1.5 percent TRASM headwind due to Easter shift into Q2, (TRASM) increased by 1.8 percent year over year
  • Better than expected improvement in salary expense and station operations resulted in unit costs excluding fuel (CASM-ex)increasing by only 0.8 percent year over year

Q1 2019 airline network and revenue highlights

  • Ancillary air revenue per passenger highest in company history at $53.10 up 12.5 percent year over year
    Total fare per passenger was $127.75, up 2.9 percent year over year
  • Fixed fee flying revenue was $10.6 million, flat year over year, despite a 6.5 percent decrease in fixed fee departures
    Government shutdown eliminated some expected Department of Defense charters
    • Airbus charter economics superior to the MD-80
  • Announced two new operational bases
    • Grand Rapids, MI
    • Savannah, GA
  • 35 routes announced
    • New service to Anchorage, AK
    • Strong growth to Destin, FL, Nashville, TN and Savannah, GA

Q1 2019 airline cost highlights

  • Fuel benefits with Airbus continue – total fuel costs down by six percent
  • Total gallons down 4.5 percent while block hours up 4.1 percent and ASMs up 4.9 percent
    • Increase in ASMs per gallon of 9.6 percent to 84.1 ASMs per gallon
    • Decrease in the price per gallon of 1.8 percent to $2.14 per gallon
  • Total operating costs excluding fuel were $250.2 million, an increase of 5.8 percent year over year
    Depreciation costs increased 26.9 percent or $7.5 million
    • Q1 2018 MD80s were fully depreciated; were 27.5 percent of ASMs
  • Total unit costs excluding fuel and depreciation were 5.5 cents, a decrease of 2.0 percent year over year
  • $3.7 million of additional interest expense associated with the tender of our $450 million high yield bond
    • Capitalized interest resulted in a $1.5 million reduction in interest expense primarily driven by the capex associated with Sunseeker Resorts
    • Expect the cadence of capitalized interest to increase in direct correlation with incremental Sunseeker capex

Q1 2019 airline operational highlights

  • Departures up five percent despite eleven fewer average aircraft
    • Average aircraft decreased from 91 last year to 80 this year
    Spare aircraft were reduced from eleven to four year over year
  • Controllable completion 100 percent on 24,300 departures
    • Second most quarterly departures in company history
    Total completion factor 99.2 percent
    • No maintenance cancellations for over 120 days since December 16th, record for the company
    On time performance (A-14) for the quarter was 79 percent
    • March on time performance was 85 percent
    • Third-highest versus domestic carriers per flightstats.com
    • Company’s busiest flying month of the year

Q1 2019 capital allocation highlights

  • Capital expenditures:
    • Airline – $108.9 million
    • Heavy Maintenance – $10.0 million
    • Sunseeker – $5.3 million
    • Other – $8.4 million
  • Shareholder returns
    • Returned $11 million in dividends in the first quarter
    • Expect to pay dividends of $0.70 per share on June 27, 2019 to shareholders of record as of June 14, 2019

Q1 2019 balance sheet highlights

  • Ended with $555 million in total cash and investments
  • Ended with $1,236.6 million in debt and $121.1 million in capital lease obligations
    Refinanced $450 million unsecured bond with a five year $450 million term loan
    • Secured by company assets excluding aircraft, engines and Sunseeker Resort
  • At the end of the quarter, we have 28 unencumbered aircraft

Q1 2019 non-airline highlights

  • Non-airline businesses resulted in a combined operating loss of $7.4 million
    • Non-airline operating losses expected to be highest in Q1 due to one-time expenses associated with opening of two Allegiant Nonstop family entertainment centers
    • Allegiant Nonstop revenues are expected to be weakest in Q1
    • Expect improvement in second half of year
  • Sunseeker Resorts
    • Broke ground on resort in Punta Gorda
    • Expect to include 500 hotel rooms, 189 long stay suites, restaurants, bars and other amenities
    TPG Sixth Street Partnersagreed to provide $175 million in two-thirds non-recourse construction financing
    • TPG funds are last funds into the project and drawn monthly with interest paid only on drawn amounts
  • Allegiant Nonstop (family entertainment centers)
    • Rebranded to Allegiant Nonstop for better tie-in to airline
    • Opened first location, Clearfield, UT in Jan 2019
    • Opened second location, Warren, MI in Apr 2019

Top Copyright Photo (all others by the airline): Allegiant Air Airbus A320-214 WL N250NV (msn 7743) BWI (Tony Storck). Image: 943561.

Allegiant aircraft slide show:

Allegiant Air files application with DOT to fly to Mexico

Ex Saudia HZ-AS14, delivered March 29, 2018

Allegiant Air today signaled its next phase of growth by filing an application with the U.S. Department of Transportation (DOT) to offer scheduled service between the United States and Mexico.

This will be the company’s initial venture into scheduled international service.

The DOT application is the first step in the process for Allegiant to begin scheduled service to Mexico. Projected dates and locations for commencement of service will be announced at later dates as the process moves forward.

Top Copyright Photo (all others by the airline): Allegiant Air Airbus A320-214 N261NV (msn 4115) LAX (Michael B. Ing). Image: 943560.

Allegiant Air aircraft slide show:

Airbus launches “Skywise Health Monitoring” with Allegiant Air as an early adopter

Airbus has launched first operations of a new Skywise service – Skywise Health Monitoring (SHM) – with Allegiant Air on its Airbus A320s. Dynamically coupled with Skywise Reliability Services (SRS) and Skywise Predictive Maintenance (SPM), SHM is hosted on Skywise, gathering live diagnostic feeds from the aircraft through its ACARS* link to the airline’s information system.

Using the power of the Skywise aviation data platform, SHM collates and centralizes the alerts, flight-deck effects, maintenance messages etc., prioritises them, correlates any faults with the relevant troubleshooting procedures, highlights operational impacts, provides the maintenance history of the system (from the logbook and MIS** information collected through Skywise Core and stored in the data lake), allowing effective tracking of the alerts.

When fully deployed, and following the in-service feedback from Allegiant Air and other “early adopters,” SHM will support airlines’ Maintenance Control Centers, Line Maintenance and Engineering departments in identifying, prioritising, analysing and handling in-service events, enabling quicker decision-making and preparation of the optimal solution to ensure aircraft on-time dispatch and minimising AOG risks.

Overall, SHM saves airlines time and decreases the cost of unscheduled maintenance. Natively interfaced with SPM and SRS to provide an integrated user experience, and also ready to harness the new on-board Flight Operations and Maintenance Exchanger (“FOMAX”) data router which can capture over 20,000 real-time aircraft parameters, SHM enables end-to-end unscheduled event management/fixes, for example by anticipating tools and parts’ availability closest to the aircraft. More early adopters will join in the months to come to pilot SHM for other Airbus aircraft, including the A330, A350 and A380.

*ACARS = Aircraft Communication Addressing and Reporting System

**MIS = Maintenance Information System

Allegiant announces a new base in Savannah

Allegiant Air Airbus A319-111 N317NV (msn 2477) LAX (Michael B. Ing). Image: 944029.

Allegiant Travel Company today (April 3) announced plans to establish a two-aircraft base at Savannah-Hilton Head International Airport in Savannah, Georgia.

Allegiant began operating at Savannah-Hilton Head International Airport in 2015 and with today’s announcement now offers 15 nonstop routes – to Albany, Niagara Falls and Newark in the New York region; Cincinnati, Cleveland and Columbus, Ohio; Grand Rapids, Michigan; Indianapolis, Indiana; Louisville, Kentucky; Nashville, Tennessee; Pittsburgh and Allentown, Pennsylvania; Portsmouth, New Hampshire; Providence, Rhode Island and Baltimore, Maryland.

Allegiant currently carries more than 240,000 annual passengers through Savannah.

Savannah will become the airline’s 17th aircraft base, which will allow Allegiant to expand its service to and from the city, offer more new nonstop routes in the future.

Top Copyright Photo: Allegiant Air Airbus A319-111 N317NV (msn 2477) LAX (Michael B. Ing). Image: 944029.

Allegiant Air aircraft slide show:

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