Allegiant Travel Company has reported a second quarter 2024 net profit of $13.7 million or $0.75 per diluted share on a 2.6 percent year-over-year decline in revenue to $666 million. At June 30, 2024, the company had total liquidity of $1.1 billion.
On Wednesday (July 31, 2024), Allegiant Travel Company reported their second quarter financial results for the period ending June 30, 2024. The carrier reported a second quarter net profit of 13.7 million or $0.75 per diluted share on a 2.6 percent year-over-year decline in revenue to $666 million. Allegiant’s Q2 total revenue per available seat mile (TRASM) declined 4.6 percent compared to the same period last year to 13.13 cents, while costs per available seat mile excluding fuel (CASM-ex) increased by 5.6 percent to 8.23 cents. The company has $1.1 billion in liquidity at the close of the second quarter, including $851.1 million in cash and cash equivalents, as well as $275 million in undrawn revolving credit facilities.
In Wednesday’s announcement, Allegiant Travel Company’s Chairman and CEO, Maurice J. Gallagher, Jr., said,
“We finished the quarter with diluted earnings per share, excluding special charges, of $1.77. Peak period demand trends across our airline business remained strong during the quarter and notably, ancillary outperformed. We achieved $75.34 per passenger in total ancillary, a five percent increase over the prior year, driven by strength in seats, bags and cobrand. As we head into the third quarter, we expect a modest growth profile of just over one percent year-over-year with that growth coming in peak July and early August. Based on seasonal norms and consistent with how our model has historically operated, off-peak September capacity represents roughly half the capacity flown in July.
“As others have noted, this summer experienced increased capacity across the industry. While this has affected yields overall, our unique network structure has provided us with a layer of insulation. As I have mentioned before, we operate in our own swim lane with 75 percent of our routes facing no nonstop, direct competition. This number has remained virtually unchanged for over a decade and our expected growth profile maintains this non-competitive landscape.”
Also commenting on Allegiant’s second quarter results, Allegiant’s President and incoming CEO, Gregory Anderson, said,
“I want to thank our team members for another quarter of strong operational performance, yielding a near-industry leading controllable completion of 99.7 percent for the quarter. Financially, I am pleased with the progress we made during the second quarter, with the airline generating an adjusted operating margin of 10.3 percent for the quarter. Peak June utilization increased six percent from the prior year.
“We have two weeks remaining in our peak-summer period, and our operational performance has been terrific, with July utilization up roughly five percent over the prior year. Like many in the industry, we were challenged with a vendor technology outage that temporarily paused our flying. Full operations resumed less than 12 hours later. I am incredibly grateful with how Team Allegiant came together and quickly responded, ensuring the successful continuation of hundreds of flights on one of our highest scheduled flying days in our history. Since then we have run a 99.4 percent controllable completion factor – one of the best among impacted airlines. We expect the total financial impact from the outage will be approximately $15 million.
“Looking forward to 2025, we are on track to both return to pre-pandemic utilization levels and reduce operating inefficiencies related to Boeing’s delivery delays. We now expect to receive our first aircraft in September. Near-term increases in utilization are expected to be accomplished with roughly the same number of aircraft and same size infrastructure, which should have the dual benefit of increased revenues and lower unit costs. We also look forward to a full-year benefit from our recently installed Navitaire reservation system. We expect our enhanced Navitaire improvements to be a significant boost to the bottom line in 2025.
“Regarding Sunseeker, we continue to believe this one-of-a-kind resort holds greater value than currently reflected. To realize its full potential, however, we have engaged Prospect Hotel Advisors to conduct a strategic review of the property. Additionally, we now expect to receive up to $10 million of business interruption insurance for the full year 2024 due to delays in opening the resort. This will offset our expected full-year EBITDA loss of $25 million, reducing our cash loss estimate to approximately $15 million.
“The combination of increased utilization during our peak demand periods, the addition of our Boeing aircraft, the optimization of Navitaire and the benefits from Prospect Advisors should position us for a much-improved 2025 and beyond.”
Founded in 1999, Las Vegas-based Allegiant Travel Company is an integrated travel company with an airline at its heart, and a focus on linking passengers from small to medium cities to world-class leisure destinations with all non-stop flights and industry-low average fares. The company offers base airfares that are often half the price of a typical roundtrip ticket and currently operates an all-Airbus A320 Family fleet. Allegiant has also placed an order for up to 100 Boeing 737-7 and 737-8-200 MAX jets. The company also owns and operates the recently opened Sunseeker Resort Charlotte Harbor, located on the Gulf Coast in Southwest Florida.
Source: Allegiant Travel Company
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