Allegiant Travel Announces Strategic Operational Measures, Suspends Sunseeker Resort Construction
Allegiant Travel announced on Wednesday a series of strategic operational measures to preserve liquidity, including the temporary suspension of their Sunseeker Resort Charlotte Harbor in southwest Florida.
Today, the Allegiant Travel Company (Allegiant) announced a series of strategic measures to minimize the operational impact of the global COVID-19 pandemic. The low-cost carrier will temporarily suspend construction of their Sunseeker Resort Charlotte Harbor in southwest Florida, reduce capacity and implement a hiring freeze. Allegiant will increase their April and May capacity cuts from 15% to between 30-35% and temporarily close their family entertainment centers in Warren, Michigan and Clearfield, Utah until further notice. These measures will preserve liquidity, while supporting social-distancing to help prevent the spread of COVID-19. In Wednesday’s announcement, Allegiant’s Chairman and CEO, Maurice J. Gallagher, Jr., said,
“This is an unprecedented situation and our team has come together in extraordinary ways to ensure our customers can continue to fly with confidence, while taking steps to ensure the ongoing financial health of the company. As a domestic airline with a unique business model serving primarily leisure travelers, we were better positioned than most to withstand the early impact of COVID-19 on travel. But this is a situation which is changing daily, and we are focused on taking proactive steps to protect the health and safety of our customers and team members, and to ensure our resilient company can continue to provide access to convenient, affordable nonstop travel.”
Allegiant has also placed a moratorium on non-essential capital expenditures and discretionary spending, suspended stock buybacks and dividend activity and will explore additional borrowing opportunities. Allegiant's Chairman and CEO, Maurice J. Gallagher and President John Redmond do not draw salaries, but other company officers will take a 50% pay cut. Also commenting on today’s announcement, Allegiant’s Chief Financial Officer, Greg Anderson added,
“This set of initiatives could defer as much as $300 million in planned cash outlay for 2020. In addition, meaningful capacity cuts will help to preserve additional liquidity. The flexibility of our business model – particularly our low fixed cost structure – will go a long way to help navigate these uncertain times and put us in a strong position moving forward. these initiatives we believe we are well positioned to mitigate the impact to our sector of COVID-19, but we will continue to be proactive in our approach to mitigate both current and long-term effects, and to bring forward additional measures as needed.”
Founded in 1999, Allegiant links passengers from small to medium cities to world-class leisure destinations with all non-stop flights and industry-low average fares. The carrier operates 450 routes nationwide and offers base airfares that are often half the price of a typical roundtrip ticket. Allegiant's Sunseeker Resorts subsidiary is building a major resort in Port Charlotte, in Southwest Florida, but construction has been temporarily suspended, in order to preserve company liquidity.
Source: Allegiant Travel Company
Editor's Note: We stand by the entire Allegiant team and all airlines during this difficult period as the entire world fights to limit the transmission of, and ultimately recover from, the global COVID-19 pandemic. Once it has been defeated, we look forward to the emergence of an even stronger and more robust global commercial airline industry.