Tag Archives: Allegiant Air

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:

Advertisements

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:

x

Allegiant announces 19 new routes

Allegiant Air Airbus A319-112 N332NV (msn 2638) LAX (Michael B. Ing). Image: 945205.

Allegiant Air announced 19 new twice-weekly seasonal routes for the summer season. Destin-Fort Walton Beach and Nashville received the greatest number of new routes:

Destin-Fort Walton Beach, Florida

Des Moines, Iowa: Two weekly flights starting May 16

Huntington, West Virginia: Two weekly flights starting June 6

Little Rock, Arkansas: Two weekly flights starting May 17

Rockford, Illinois: Two weekly flights starting June 5

Shreveport, Louisiana: Two weekly flights starting May 17

Toledo, Ohio: Two weekly flights starting June 7

Wichita, Kansas: Two weekly flights starting June 5

Nashville, Tennessee

Allentown/Lehigh Valley, Pennsylvania: Two weekly flights starting May 17

Bentonville/Northwest Arkansas Regional Airport: Two weekly flights starting June 6

Cedar Rapids, Iowa: Two weekly flights starting May 17

Cleveland: Two weekly flights starting May 16

Harrisburg, Pennsylvania: Two weekly flights starting June 6

Orlando/Sanford, Florida: Two weekly flights starting May 17

Los Angeles

Bozeman, Montana: Two weekly flights starting June 5

Las Vegas: Two weekly flights starting  June 5

Savannah, Georgia

Albany, New York; Two weekly flights starting June 6

Providence, Rhode Island: Two weekly flights starting June 6

Knoxville, Tennessee

Pittsburgh: Two weekly flights starting May 17

Charleston, South Carolina

Columbus/Rickenbacker, Ohio: Two weekly flights starting June 6

Top Copyright Photo (all others by the airline): Allegiant Air Airbus A319-112 N332NV (msn 2638) LAX (Michael B. Ing). Image: 945205.

Allegiant Air aircraft slide show:

x

Allegiant announces its financial results, will add 17 additional Airbus aircraft

Ex EI-DSD, delivered on January 11, 2018

Allegiant Travel Company (Allegiant Air) has reported the following financial results for the fourth quarter and full year 2018, as well as comparisons to the prior year:

Three Months Ended
December 31,
Twelve Months Ended
December 31,
Unaudited 2018 2017 Change 2018 2017 Change
Total operating revenue (millions) $ 412.1 $ 379.2 8.7 % $ 1,667.4 $ 1,511.2 10.3 %
Operating income (millions) 63.1 26.8 135.7 243.5 230.6 5.6
Net income (millions) 41.4 83.4 (50.4 ) 161.8 198.1 (18.3 )
Diluted earnings per share $ 2.56 $ 5.18 (50.6 ) $ 10.00 $ 12.13 (17.6 )

“I’m happy to report we had our 64th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “The past 18 to 24 months have been challenging as we pushed through a successful onetime changeover to an all Airbus fleet. This was a major undertaking by our team. During this period we sustained a number of one-time transition costs but still maintained among industry leading operating margins on our airline activity of 15.3 percent despite a 27 percent increase in the cost per gallon of fuel in 2018.

“And these returns were accomplished despite the added challenges of our fleet transition years. I couldn’t be more pleased with where we find ourselves today as we look forward to 2019 and beyond. We are also pleased with our EPS-based reporting approach which we started in 2018. You will see our estimates for 2019 below.

“Finally, my hat is off to our team. They not only rose up to the logistical challenge of the fleet changeover during the past 18 months, but at the same time continued to elevate our operational performance and customer service standards across the board.”

Highlights

  • Currently 431 routes
       o Nearly 75 percent no competition – 90 percent of new 2018 routes no competition
    o Have identified an additional 600 routes for possible growth
  • 2019 expect higher EBITDA
    o Revenue improvement from higher number of incremental seats
    o Greater efficiencies in labor and fuel consumption
    o Higher aircraft reliability will enable more flights during peak days
    o Higher number of charter opportunities versus the MD-80
  • 2018 improvement in operations
    o Controllable completion – 99.7 percent, among best in industry
    o Improved operations – over $10 million in cost savings
    o On time arrival 77 percent, up nearly four percentage points over 2017
  • Co-brand credit card
    o Active accounts increased by approximately 60 percent versus 2017
    o Signed marketing agreement with Minor League Baseball participating clubs
  • 2019 high yield bond refinancing
    o $450 million term loan
    o Five year duration
    o Expected to close in early February

Shareholder returns

  • 2018 shareholder returns
    o Returned $45 million in dividends in 2018
    o Will pay dividends of $0.70 per share on March 14, 2019 to shareholders of record as of March 1, 2019
    o $100 million in share repurchase authority

2019 outlook

  • Aircraft
    o Expect to add seventeen Airbus aircraft by the end of the year
    o Have now terminated forward capital leases for eight aircraft due to extensive delivery delays
  • Scheduled and system ASM growth
    o First quarter expected to grow between four and six percent vs last year
    o Expect first quarter ASM growth to be the lowest of the year
    o Expect second quarter ASM growth to be the highest of the year due to later Easter
  • Sunseeker Resort financing
    o Expect $175 million of the estimated $420 millionSunseeker Resort construction cost
    o Provided by a well-known institutional asset manager
    o 2/3 of the loan is expected to be non-recourse to Allegiant Travel Company
    o Expect financing to close by the end of the first quarter 2019
Aircraft fleet plan by end of period
Aircraft – (seats per AC) YE18 1Q19 2Q19 3Q19 YE19
A319 (156 seats) 32 37 37 38 38
A320 (177/186 seats) 44 46 51 53 55
Total 76 83 88 91 93

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

Previously the company announced 16 new routes and plans to establish a two-aircraft base at Gerald R. Ford International Airport in Grand Rapids, Michigan.  The company also announced service to two new cities – Nashville, Tennessee and Savannah, Georgia.

Above Copyright Photo (all others by the airline): Allegiant Air Airbus A320-216 N273NV (msn 3076) LAX (Michael B. Ing). Image: 945314.

Allegiant aircraft slide show:

x

Allegiant adds 16 new routes, including Anchorage, Alaska

Delivered on May 22, 2018

Allegiant Air is adding 16 new routes in 2019 including its first route to Alaska (Bellingham – Anchorage):

Anchorage, Alaska

Bellingham, Washington: Seasonal service begins May 22 with two flights a week

Charleston, South Carolina

Cleveland: Seasonal service begins June 6 with two flights a week

Destin/Fort Walton Beach, Florida

Omaha, Nebraska: Seasonal service begins June 7 with two flights a week

Tulsa, Oklahoma: Seasonal service begins June 6 with two flights a week

Myrtle Beach, South Carolina

Albany, New York: Seasonal service begins June 5 with two flights a week

Hagerstown, Maryland: Seasonal service begins June 6 with two flights a week

Nashville, Tennessee

Grand Rapids, Michigan: Seasonal service begins June 6 with two flights a week

Norfolk, Virginia

Cincinnati: Seasonal service begins June 7 with two flights a week

Cleveland: Seasonal service begins June 7 with two flights a week

Mesa, Arizona

Grand Junction, Colorado: Year-round service begins April 5 with two flights a week

Kalispell/Glacier Park, Montana: Seasonal service begins May 15 with two flights a week

Knoxville, Tennessee

Denver: Seasonal service begins May 22 with two flights a week

Savannah, Georgia

Allentown, Pennsylvania: Seasonal service begins June 8 with two flights a week

Grand Rapids, Michigan: Seasonal service begins June 7 with two flights a week

Niagara Falls, New York: Seasonal service begins June 7 with two flights a week

Portsmouth, New Hampshire: Seasonal service begins June 8 with two flights a week

Top Copyright Photo: Allegiant Air Airbus A320-214 WL N256NV (msn 8220) LAX (Michael B. Ing). Image: 943865.

Allegiant aircraft slide show:

x