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

 

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

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

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

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

First Quarter 2021 Results

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

(1) Adjusted excludes COVID related special charges and the net benefit from the Payroll Support Program Extension Agreement (the “PSP2”)
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information

Balance Sheet, Cash and Liquidity

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

Capital Expenditures

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

 

Aircraft Fleet Plan by End of Period

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

Allegiant aircraft slide show: