Tag Archives: Allegiant Travel Company

Allegiant Air to add four more Airbus A320s

Allegiant Travel Company (Allegiant Air) (Las Vegas) has announced that it has entered into an agreement to purchase four additional Airbus A320 aircraft. The aircraft are currently being operated in Europe and are scheduled to enter the Allegiant operating fleet in 2017.

The airline continued:

“We are active in the used Airbus A320 market and will engage in transactions that make economic sense for the company,” said Jude Bricker, Senior Vice President of Planning. “These aircraft will help us maintain our desired growth rate into 2017 and provide us with additional high quality A320 aircraft. It is also another demonstration of our ability to grow the fleet while still providing returns to shareholders such as our recently announced $0.25 per share recurring quarterly cash dividend and the $86 million remaining in our share repurchase authority,” concluded Bricker.

These aircraft are expected to begin service in the second half of 2017. The purchase of the aircraft will take place upon delivery in 2017 and will not impact 2015 CAPEX, which is still expected to be $175 to $185 million.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Airbus A320-214 N218NV (msn 1229) in special “Make-A-Wish” livery arrives back at the Sanford, Florida base.  The special color scheme was introduced on December 10, 2013.

Allegiant Air aircraft slide show:

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Due to the write down of the Boeing 757 fleet, Allegiant reports a lower profit

Allegiant Travel Group (Allegiant Air) (Las Vegas) reported financial results for the fourth quarter and full year 2014. For the 4Q, the company reported net income of only $4.8 million, down 72.6 percent from the same period a year ago when it reported a 4Q net profit of $17.5.

For 2014, the company reported a net profit of $86.7 million versus $92.3 million for 2013.

This represents the 48th consecutive profitable quarter. The lower earnings were due to a write down in the value of its Boeing 757-200 fleet of $43.3 million in the fourth quarter as previously reported.

“We are very proud to report our 48th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “Excluding the one-time charge related to the write down of our 757 fleet, full year operating margin increased again, for the third year in a row in spite of a number of operational challenges. Looking forward, we see better execution in 2015.”

Read the full report: CLICK HERE

Copyright Photo: TMK Photography/AirlinersGallery.com. Boeing 757-204 N905NV (msn 27235) lands at the Las Vegas home.

Allegiant Air aircraft slide show:

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Allegiant Air’s pilots formally request arbitration from the National Mediation Board

Allegiant Air‘s (Las Vegas) pilots have formally asked the National Mediation Board (NMB) to arbitrate the contract dispute between the pilots, represented by the International Brotherhood of Teamsters, and management. The union issued this statement:

The International Brotherhood of Teamsters will host a call to update Allegiant Travel Company investors, industry analysts, customers and press regarding the current status of contract negotiations for Allegiant Air pilots, their recent strike authorization vote and the union’s request for a proffer of arbitration from the National Mediation Board.

On behalf of the approximately 500 pilots at Allegiant Air, the International Brotherhood of Teamsters Airline Division and its affiliate, Airline Professionals Association of the International Brotherhood of Teamsters Local 1224 (collectively, the “IBT”) filed a request on Friday afternoon, January 23, asking the National Mediation Board to make a proffer of arbitration. The request follows over two-and-a-half years of negotiations and mediation that have yet to result in a contract.

“Allegiant Air pilots have propelled the company to significant growth and prosperity, despite challenging operating conditions and breakdowns at the company. Yet, management continues to show its contempt for its operational employees by negotiating in bad faith,” said Daniel Wells, president of APA Teamsters Local 1224. “Allegiant Air pilots have had enough.”

Copyright Photo: Bruce Drum/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N864GA (msn 49912) arrives back at the Las Vegas base painted in the old 2003 livery.

Allegiant Air aircraft slide show:

Allegiant takes a $43.2 million write-down on the value of its Boeing 757-200 aircraft fleet, likely to be replaced sooner

Allegiant Travel Company (Allegiant Air) (Las Vegas) reported that it is taking a $43.2 million write-down on the value of its Boeing 757-200 aircraft fleet. The write down on the balance sheet came after a review of the value of the six Boeing 757-200s. For now, the company will continue to operate the type, mainly to Hawaii, in the near term. However the type is not expected to be operated through the full life of each aircraft. Allegiant is now likely to find a replacement aircraft (Airbus A321?) for the 757s earlier than what was previously planned. The charge will occur in the fourth quarter of 2014.

The company issued this statement:

“This non-cash impairment charge resulted from a recent review of the value of the Company’s Boeing 757 assets,” stated Maurice J. Gallagher Jr., Chairman and CEO of Allegiant Travel Company. “We evaluate factors such as our ability or intent to operate fleet types through their estimated useful lives, potential changes to fleet residual values based on changes in market conditions for used aircraft, spare engines and parts and potential changes to our scheduled revenue network based on competition trends and operational performance. Based on our review the Company concluded that the estimated future cash flows for its six 757-200 series aircraft, spare engine and parts pool did not support the net book values on our balance sheet. This decision reflects the Company’s view that our 757 fleet will be held for a period less than their current expected useful lives, which is currently seven years or through 2021. In addition, residual values for 757 aircraft will be reduced from $6 million to $3 million based what we believe is a permanent decline in the used 757 market. The Company will continue to operate 757 aircraft on longer-haul routes, including Hawaii, in the near term.”

With this write down, the Company expects fourth quarter CASM ex fuel to increase between 40 and 41 percent versus last year. Prior to the charge, the fourth quarter was trending towards the lower end of the range provided on October 22, 2014.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Formerly operated by Britannia Airways/Thomsonfly/Thomson Airways, Boeing 757-204 N903NV (msn 26966, ex G-BYAH) arrives from Hawaii in Las Vegas. The jetliner was originally delivered on February 5, 1993.

Allegiant aircraft slide show:

Allegiant Travel Company reports its 47th consecutive profitable quarter

Allegiant Travel Company (Allegiant Air) (Las Vegas) reported a third quarter net profit of $14.2 million, down 17 percent from the same quarter a year ago. The holding company has reported the following financial results for the third quarter 2014, as well as comparisons to prior year equivalents:

Allegiant 3Q14 Financial Box

“We are very proud to report our 47th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “During this quarter we saw the departure of Andrew Levy, our President and COO. Andrew will be missed. He has left the company in great shape. His legacy includes building a solid, capable management team which ensures the company will maintain its strong performance into the future. In addition, we have also welcomed back Kris Bauer as the airline’s Senior Vice President of Operations and COO while we conduct our search for a replacement. Earlier this week, our Board of Directors approved an increase to our share repurchase authority to $100 million from its current level of $7.4 million. We continue to see strength in the business model and are demonstrating that confidence by actively returning cash to shareholders. Lastly, I want to thank all of our Team Members for their continued efforts during the past quarter.”

Notable company highlights

Repurchased 456,296 shares during the quarter, which brings the total to 1,199,740 shares for the first nine months of 2014. Since the inception of the share repurchase program, the company has repurchased 4,692,385 shares for a total of $316.3 million through the third quarter 2014

Purchased two A319s in August off operating lease

Added three new destinations to Cincinnati. Cincinnati has become the fastest growing origination city in the company’s history

In-service Airbus fleet accounted for over 21 percent of total ASM production in the quarter. In the quarter the company operated ten Airbus aircraft which is 14 percent of the total fleet

Third quarter 2014 revenue performance

East Coast TRASM declined 1.4 percent, however capacity in these markets grew 27.3 percent. Flying on the East Coast accounted for 40 percent of entire network versus 36 percent a year ago

Hawaii TRASM grew 12.7 percent versus the same period a year ago

Average fare – ancillary air-related charges increased 2.1 percent, as we implemented a fee to print a boarding pass at the ticket counter in

September 2014, and also due to continued strength in existing ancillary categories such as assigned seat fees, trip flex and priority boarding

Allegiant 3Q14 Fleet Plan

Copyright Photo: Ken Petersen/AirlinersGallery.com. The McDonnell Douglas fleet is holding steady at 53 aircraft while newer Airbus A319s and A320s are being added. McDonnell Douglas DC-9-83 (MD-83) N418NV (msn 49615) arrives at the Las Vegas home.

Allegiant Air: AG Slide Show

Allegiant’s President and COO Andrew C. Levy steps down

Allegiant logo-1 (large)

Allegiant (Las Vegas) announced Andrew C. Levy, President and COO of Allegiant Travel Company, has resigned from his executive positions with the company and will step down from the Allegiant board.

For the past 13 years, Mr. Levy has led Allegiant in a variety of roles, including most recently as President, Chief Operating Officer and Board Member and previously as Managing Director and Chief Financial Officer. During his tenure, Allegiant has grown from a single aircraft company to a billion dollar leader in the leisure travel space that has posted 46 consecutive profitable quarters.

Mr. Gallagher and the executive team will temporarily assume his duties while Allegiant, in conjunction with its Board of Directors, identifies Mr. Levy’s successor. Mr. Levy will continue to serve as an advisor to the company for the next several months.

In accordance with Mr. Levy’s separation agreement all unvested equity incentive options and restricted stock will immediately vest, thus impacting stock compensation expense during the third quarter. The company will update its cost guidance in the upcoming September traffic release.

According to Bloomberg Businessweek, “Mr. Andrew C. Levy has been the President of Allegiant Travel Company since October 2009 and has been its Chief Operating Officer and a Director since October 21, 2013. Mr. Levy has been the Chief Financial Officer of Allegiant Air, LLC. since August 2007 and also has been its President served as its since October 2009. Mr. Levy served as Managing Director of Planning and Secretary at Allegiant Travel Co. until October 2009, and as its Chief Financial Officer since October 18, 2007 until May 2010. He served as Managing Director of Planning of Allegiant Air, LLC. Mr. Levy joined Allegiant in June 2001 and is responsible for Allegiant Travel Co. market planning, fleet planning, scheduling, fuel risk management, fuel purchasing and corporate development. From February 1998 to March 2001, Mr. Levy served various management positions at Mpower Communications, Savoy Capital and ValuJet Airlines. From July 1996 to February 1998, Mr. Levy served on Airline Advisory and Transactional as Vice President with Savoy Capital. From 1994 to 1996, Mr. Levy served various positions with ValuJet Airlines including Director of Contracts and was responsible for stations agreements, insurance, fuel purchasing and other related activities.”

Allegiant Air hosts The Game Plane, a new in-flight TV game show

Allegiant The Game Plane Mark Walberg

Allegiant Air (Las Vegas) announced, in partnership with Alpine Labs, the premiere of THE GAME PLANE, the world’s first game show to be filmed entirely in-flight with real passengers competing in real time to win prizes on the spot.

Part quiz show, part game of chance, THE GAME PLANE features Allegiant passengers on their way to vacation, competing for thousands of dollars in prizes, including all expenses-paid vacations at Las Vegas’ most popular luxury resort properties, airfare to Honolulu on Allegiant, Las Vegas show tickets and more. THE GAME PLANE is produced by Alpine Labs and filmed in-flight on Allegiant scheduled service.

“Allegiant prides itself on being an innovator in the airline industry, so the opportunity to be a part of the first-ever in-flight game show is a perfect fit,” said Brian Davis, Allegiant Travel Company Vice President of Business Development. “The energetic, fun atmosphere of the show is an extension of our vacation-focused brand, and the amazing prizes won by the contestants — our passengers — highlight all of the amazing things our destinations have to offer.”

“We are thrilled to partner with Allegiant on this amazing opportunity to showcase a whole new setting for the game show,” said Alpine’s Kevin Abrams. “Our goal is to remind viewers how much fun going on vacation is and that there are still exciting new ways to visit the game show format. THE GAME PLANE is an example of how we are introducing an original take on production.”

The show will premiere on September 20, 2014 and will air in over 75 percent of U.S. television markets on a syndicated network of stations led by the CBS Television Stations group.

Copyright Photo: Alpine Labs. Host Mark L. Walberg started his television career as an assistant at Dick Clark Productions and quickly moved in front of the camera as the announcer for the popular game show Shop Til You Drop and then as host of Burnt Toast, a sports magazine show on ESPN. It was there that the late Brandon Tartikoff noticed his work, and that association produced the nationally syndicated The Mark Walberg Show. Since then, Walberg has hosted and been featured in an array of popular talk, reality competition, and game shows, including the FOX hit The Moment of Truth. He also has hosted home improvement competitions The Mansion and House Rules, knowledge quiz shows Test the Nation and Russian Roulette, and won The Weakest Link as a contestant playing for charity. He also hosted the relationship challenge Temptation Island. Realizing a long-held ambition to produce, Walberg created and produced Sunday Dinner, the first original series for the Odyssey Network, with long-time friend and television personality Mark DeCarlo (Curb Your Enthusiasm, Jimmy Neutron).

In addition to his successful television career, Walberg believes strongly in devoting time to create opportunities for young people. Currently he is on the board of directors of Goodwill of Southern California. He’s proud to be part of an organization that is instrumental in providing hope and new futures for people who need help. He also is very involved with The Young Americans, a musical performance youth group that tours the world offering music workshops in underserved schools. In addition to Walberg, alumni include actor Tim Bagley (Grimm) and actress Nia Peeples (The Young and the Restless) He has completed production on a feature-length documentary about The Young Americans’ work. Says Walberg, “The personal transformation that happens to people when they are given the ability to express themselves through the arts, specifically music and dance, is inspiring.”

Allegiant Air: AG Slide Show

Allegiant announces its 46th consecutive profitable quarter

Allegiant Travel Company (Allegiant Air) (Las Vegas) reported net income of $33.5 million for the second quarter 2014, ending on June 30, up 29.8 percent from the previous second quarter net profit of $25.8 million in 2013.

“We are very proud to report our 46th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We have been working very hard to mitigate the crew training issues that have impacted us in the past two quarters. Although these issues did contribute to operational inefficiencies and incremental costs during this past quarter we are trending in the right direction and hope these issues have minimal impact in the third quarter. On a much more positive note, in June we completed multiple aircraft transactions to add 14 additional aircraft to our future fleet and raised $300 million of debt in the high yield market with very competitive terms. We could not have done this without the tremendous effort of our Team Members.”

Notable company highlights:

Increased operating margin, EBITDA margin and return on capital employed versus the same time last year

Acquired 12 incremental A319 Airbus aircraft for delivery in 2018. See table below for financial impact of this transaction

Signed agreements to acquire one A320 and one A319 to be in service in 2015 and 2016, respectively

Entered into a letter of intent to purchase eight A319s, previously committed to under operating leases.

Two of these are currently under operating lease to Allegiant, one is expected to be delivered in 2014 and five are expected to be delivered in 2015

In-service Airbus fleet of 10 aircraft accounted for 21.9 percent of total ASM production during the quarter

Prepaid $121.1 million, 5.75 percent term loan facility due 2017

Raised $300 million, 5.50 percent senior unsecured notes due 2019, corporate rating of BB- by Standard & Poor’s and Ba3 by Moody’s

Raised $85.3 million collateralized by 53 MD-80 and six 757 aircraft

Initiated service on 12 new routes in the second quarter

Named Top-Performing Airline in North America by Aviation Week for third consecutive year. The Company also has the best five-year average score of any airline worldwide, 76.9, more than 5 points higher than the second-ranked carrier

Read the full report: CLICK HERE

Fleet Details:

Allegiant Fleet Numbers 7.2014 (LRW)

 

 

Copyright Photo: The fleet will grow by 10 aircraft (mainly Airbus A319s and A320s) in the next two years while the Boeing 757s remain constant at six aircraft. Boeing 757-204 N903NV (msn 26966) is tugged off the gate at Los Angeles International Airport.

Allegiant: AG Slide Show

 

 

Allegiant starts seasonal service between Cincinnati and Myrtle Beach

Allegiant Air (Las Vegas) yesterday (May 31) started nonstop, seasonal jet service from Cincinnati-Northern Kentucky International Airport to Myrtle Beach. The new flights will operate two times a week until August 11, 2014, flying nonstop from Cincinnati-Northern Kentucky International Airport (CVG) to Myrtle Beach International Airport (MYR). Myrtle Beach becomes the fourth destination available to Allegiant travelers flying out of CVG, including Sanford, Punta Gorda and St. Petersburg/Clearwater.

In other news, Allegiant Travel Company also announced it has borrowed $40.0 million under a loan agreement with CIT, secured by six Boeing 757-200 aircraft (above) and twelve RB211 engines. The notes payable issued under the loan agreement, bear interest at a floating rate based on London Interbank Offered Rate (LIBOR). The term of the loan is 48 months and the proceeds are to be used for general corporate purposes.

Copyright Photo: James Helbock/AirlinersGallery.com. Allegiant’s Boeing 757-204 N906NV (msn 27236) approaches the runway at Las Vegas.

Allegiant Air: AG Slide Show

Allegiant Air posts its 45th consecutive profitable quarter

Allegiant Travel Company (Allegiant Air) (Las Vegas) reported net income of $34.2 million for the first quarter, up 7.2 percent from the same quarter a year ago. The travel company issued the following financial results for the first quarter 2014, as well as comparisons to prior year equivalents:

Allegiant 1Q14 Results

“We are very proud to report our 45th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We are pleased to produce another profitable quarter despite significant operational challenges and unusually high one-time costs that impacted our overall financial performance. This was a very difficult operational quarter as we navigated through significant flight crew availability issues stemming from external factors that occurred last year. I am happy to report that our Team Members overcame this adversity and pulled together another solidly profitable quarter.”

Notable company highlights:

Integrated A320 aircraft into scheduled operations. Ended the quarter operating three A319 and seven A320 aircraft

A319 and A320 fleet accounted for 17.9 percent of total ASM production during the quarter

Integrated two MD-80 aircraft configured with 166 seats to the fleet in March. Ended the quarter operating 53 166 seat MD-80 aircraft

Completed the reconfiguration of the 757 fleet from 223 seats to 215 seats and added six Giant Seats per aircraft

Announced a seasonal base in Myrtle Beach, SC, which will support two aircraft beginning in late May

Announced 12 new routes to begin operation in the second quarter

Returned $114 million to shareholders through share repurchases and a special dividend paid in January
In April, prepaid $121.3 million term loan facility using unrestricted cash and proceeds from a new $45.3 million loan through Wells Fargo Bank, collateralized by 53 MD-80 aircraft

Read the full report: CLICK HERE

Copyright Photo: Jay Selman/AirlinersGallery.com. McDonnell Douglas DC-9-83 (MD-83) N420NV (msn 49424) brings another group of vacationers to the Las Vegas base.

Allegiant Air: AG Slide Show